27 Mar 2015 07:00
AIM: REDX
Redx Pharma plc
("Redx" or "the Company" or "the Group")
First Day of Dealings on AIM following £15 million placing
Redx, the drug discovery and development company, is pleased to announce that admission and trading of its Ordinary Shares commences today on AIM, with the ticker REDX.
Redx has placed 17,647,059 New Ordinary Shares at 85p per share to raise £15 million (gross). Shore Capital is acting as the Group's Nominated Adviser and Broker and acted as sole bookrunner to the Placing. At the Placing Price, Redx's market capitalisation is approximately £55.2 million on Admission.
KEY POINTS
· Established in 2010, Redx is focused on improving the characteristics of existing drug classes to create highly differentiated 'best-in-class' new drugs principally in cancer and infectious disease.
· Redx has established an extensive pipeline of proprietary drug candidates, targeting best-in-class performance, which are patent protected:
- four programmes have achieved pre-clinical proof of concept, with relevance for respective therapies to treat MRSA, bone tumours, skin, brain and blood cancers, where Redx has demonstrated superior performance to competitor drugs.
· Redx's work to date has been endorsed by partnerships with global pharmaceutical companies and the NHS, including a two year research collaboration and option agreement with AstraZeneca UK Limited, focusing on an undisclosed oncology drug candidate, signed in August 2014.
· Redx's business model aims to capitalise on the growing need of established large pharmaceutical companies to replenish their drug development pipelines as well as enabling emerging pharmaceutical companies to diversify their existing pipelines.
· As Redx continues to grow, the Directors believe that the Group should have the opportunity to develop additional valuable pipeline assets in current and new therapeutic areas.
· The net proceeds of the Placing will be used to progress the Group's current pipeline of oncology and infectious disease assets and support the launch of a third subsidiary focused on immunology.
Neil Murray, Chief Executive Officer of Redx, commented:
"I am delighted that Redx has joined AIM and, at the same time, successfully raised some £15m of new funding. The Company is now embarking on the next stage of its development and we believe that prospects are exciting.
Our business model is to improve on existing drug classes and to partner early, and in doing so establish Redx as a highly attractive pipeline generator for large pharma and emerging life science companies. We already have a pipeline of potential drug candidates, with our focus on areas of high unmet need in cancer and infection. The new funds we have raised will support the ongoing development of our pipeline as well as the launch of a third therapeutic area focused on immunology. Meanwhile our objective of the Company attaining early profitability remains."
For further information, please contact:
Redx | T: 0151 706 4747 | |
Neil Murray, Chief Executive Company website: redxpharma.com | ||
Shore Capital (Nomad and Broker) | T: 020 7408 4090 | |
Bidhi Bhoma / Patrick Castle / Edward Mansfield | ||
KTZ Communications | T: 020 3178 6378 | |
Katie Tzouliadis / Deborah Walter |
PLACING STATISTICS
Placing Price | 85 pence |
No. of Ordinary Shares in issue immediately prior to the Placing | 47,334,150 |
No. of Placing Shares being issued pursuant to the Placing | 17,647,059 |
Enlarged Share Capital | 64,981,209 |
Placing Shares as a percentage of the Enlarged Share Capital | 27.2% |
Gross proceeds of the Placing | £15.0 million |
Market capitalisation of the Company at the Placing Price on Admission | £55.2 million |
Unless the context otherwise requires, defined terms shall have the meaning ascribed to them in the Admission Document available on the Group's website.
INTRODUCTION AND BUSINESS OVERVIEW
Established in 2010 and based at two sites, in Liverpool and Alderley Park, Cheshire, Redx is a drug discovery and development company focused on the development of proprietary, small molecule therapeutics to address areas of unmet medical need, principally in cancer and infectious disease.
The Company's approach is to focus on improving the characteristics of existing drug classes to create highly differentiated best-in-class new drugs. Over a short period, Redx has already established a portfolio of 13 proprietary, (patent-protected) drug programmes. Four programmes have achieved pre-clinical proof of concept, with relevance for respective therapies to treat MRSA, bone tumours, skin, brain and blood cancers.
Redx's oncology-related drug programmes encompass immuno-oncology, a relatively new area of medicine which focuses on the development and delivery of therapies that improve the body's intrinsic potential for generating an effective immune response against cancer. This is an area of high interest to pharmaceutical companies.
The directors of the Company believe that Redx's current pipeline of anti-infective drug programmes has the potential to produce one of the first new chemical classes of antibiotics in a generation, which, if achieved, would be a landmark in the global fight against anti-microbial resistance. In addition, Redx is working on a number of antiviral targets including Hepatitis B and influenza.
In addition to oncology and infection, Redx has the opportunity to launch into a third therapeutic area, immunology, and has secured an offer of a Regional Growth Fund grant of £4.2 million to support this. The Company expects to commence operations in this new area during 2015.
COMMERCIAL PARTNERSHIPS, INCLUDING WITH ASTRAZENECA AND THE NHS
As part of its business model, Redx seeks partnering and licensing deals at an early stage in its drug development programmes with large and emerging mid-size pharmaceutical companies. These partnerships have the potential to deliver development and sales milestone income to Redx as well as royalties on future sales.
To date, Redx has secured five commercial partnerships and collaborations, the most significant being a two-year research collaboration and option agreement, signed in August 2014, with AstraZeneca UK Limited. The research collaboration is targeting the genetic drivers of tumour growth and is focused on an undisclosed oncology drug candidate.
The Company has also signed an innovative partnership with the NHS, working with The Royal Liverpool and Broadgreen University Hospital Trust on new drugs to tackle drug-resistant bacteria, including MRSA.
Its other commercial deals and collaborations are with:
· Institut de Recherche Pierre Fabre, the French pharmaceutical group, for skin cancer;
· The European Innovative Medicines Initiative (IMI) for an ENABLE project (a pharma consortium led by GlaxoSmithKline) on gram-negative microbial infection; and
· The National Institute of Allergy and Infectious Diseases (NIAID) for influenza-related drug programmes.
THE GROUP'S GROWTH STRATEGIES
The Group's growth strategies are as follows:
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| the Group is focused on securing further commercial deals for its existing programmes; |
• | the Group intends to target commercial deals which involve a combination of R&D revenues, upfront licencing fees, development milestones and royalties on commercial sales, over the 15 to 20 year lifetime of a programme's patents. Since Redx's involvement in programmes will typically terminate at candidate stage, the Group should be free to reallocate resource to new targets whilst still accruing revenues from those programmes where deals have been secured;
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| Redx has secured an offer of a further RGF grant for £4.2 million to support the establishment of a third therapeutic area focused on immunology. The Directors believe that this will allow the Group to broaden its capability and secure further deal flow; and
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| as Redx continues to grow, the Directors believe that the Group should have the opportunity to develop additional valuable pipeline assets in current and new therapeutic areas.
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KEY STRENGTHS OF THE GROUP
The Directors believe the Group has the following competitive advantages over other companies:
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| Focus of proprietary portfolio - due to Redx's focus on critical areas of interest to pharmaceutical companies in high value therapeutic areas, the Directors believe that the Company is well positioned to meet industry demand for new pipeline programmes;
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| Strength and breadth of proprietary portfolio - the range of the Company's portfolio combines both significant potential upside on commercialisation of programmes with mitigation of investment risk through the breadth of the portfolio;
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| Track record of innovation - Redx has a proven chemistry and biology expertise which has resulted in a pipeline of assets with demonstrated pre-clinical proof of concept that has been generated more quickly and cost-effectively than traditional drug discovery;
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| Business model offers an attractive risk/reward profile - the Company's model of early stage partnering with larger and emerging well-funded pharmaceutical companies lowers the typical risk profile of smaller pharmaceutical companies;
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• | Commercial validation of business model - Redx has entered into five commercial deals and collaborations in the last 18 months, including signing of an agreement with AstraZeneca UK Limited which the Company believes represents validation of its business model;
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| Broad IPR estate - the Company has a wide ranging estate of intellectual property rights within the specific pharmaceutical areas it is targeting, which the Company believes provides it with both a significant protection of its competitive position and demonstrates significant credibility to its potential partners in larger and emerging pharmaceutical companies; and
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| Range and experience of staff - the Company currently employs approximately 120 scientists with a diverse mix of capability and experience, providing the organisation with a core intellectual capability which the Company believes is well beyond that available to many other pharmaceutical companies.
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REASONS FOR ADMISSION AND USE OF PROCEEDS
The Directors believe Admission will assist the Company in its development by:
• | providing access to development capital to progress the current and future pipeline and expanding within therapy areas;
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| allowing the Company to progress programmes further to secure superior returns for investors;
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• | exploiting new therapeutic opportunities to increase deal flow;
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| strengthening the Company's balance sheet to have a stronger position in forthcoming licensing negotiations;
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• | increasing the credibility and visibility of Redx to the global pharmaceutical industry; and
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| providing the Company with the ability to incentivise its employees through the Share Option Scheme, which should assist the Company in continuing to attract, retain and motivate high calibre employees. |
The net proceeds of the Placing, amounting to approximately £13.5 million, will be used by the Company to:
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| progress the Company's current pipeline of oncology and infectious disease assets to stages which will support licence and collaboration deals; and
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| support the launch of a third subsidiary focused on immunology, additionally supported by the Company securing an offer of a £4.2 million RGF grant in 2014, which the Company expects will lead to the generation of additional pipeline assets to support future deal flow. |
DETAILS OF THE PLACING
The Placing comprises the placing by Shore Capital, as agent for the Company, of 17,647,059Placing Shares with institutional and other investors. The Placing has raised approximately £13.5 million net of expenses for the Company. The Placing Shares represent approximately 27.2 per cent. of the Enlarged Share Capital. The Placing is not being underwritten.
CURRENT TRADING
The Group is currently trading in line with management's expectations. In December 2014, the Group achieved its fourth pre-clinical proof of concept to date with its BTK inhibitor programme. In February 2015, the Company nominated a development candidate for its SMO programme in skin cancer. The Company's cash balance as at 31 December 2014 was £1.9 million.
BOARD OF DIRECTORS
Redx's Board comprises three Executive Directors and four Non-executive Directors, as set out below:
Dr. Frank Murdoch Armstrong, aged 57, Non-executive Chairman
Dr Armstrong joined the board of Redx in September 2014. He is an experienced, medically qualified pharmaceutical executive having served as a non-executive director or chairman for a number of private and public life science companies in the UK, Switzerland and the USA. Frank previously held senior positions in R&D at Merck Serono, Bayer and Zeneca.
Dr. Neil David Murray, aged 51, Chief Executive Officer
Dr Murray co-founded the Company in 2010 and has over 25 years' experience in the pharmaceutical industry, holding senior operational, commercial and R&D positions with Solutia, Vernalis (formerly Vanguard Medica), Sigma-Aldrich and Glaxo-Wellcome.
Phillip Tottey, aged 53, Chief Financial Officer
Mr Tottey joined Redx in 2013. He is a qualified accountant with significant financial and operational expertise developed during a career spanning 34 years. Having started his career at Grant Thornton, Phil's background encompasses industries including media, construction and retail.
Dr. Derek Lindsay, aged 53, Chief Operating Officer
Dr Lindsay is a co-founder of the business. Previously he was a Director of Innovation of pharmaceutical industry consortium Britest Ltd, and was formerly R&D Director of Avecia Pharmaceutical Products. Dr Lindsay has over 20 years' experience in senior R&D positions in ICI and Zeneca.
Dr. Peter Jackson, aged 51, Non-executive Director
Dr Jackson co-founded the business in 2010 and has 25 years' experience in the sector. He was formerly head of Avecia's Pharmaceutical Products business unit, with previous senior commercial and R&D positions at ICI and Zeneca. Dr Jackson has non-executive directorships with ADC Biotechnology and Yorkshire Process Technology
Norman Molyneux, aged 59, Non-executive Director
Mr Molyneux co-founded the Company and is a qualified accountant, formerly with PriceWaterhouseCoopers. Mr Molyneux also runs Acceleris, a corporate finance firm specialising in EIS led investment transactions, and has extensive experience working with growth companies
Peter McPartland, aged 61, Non-executive Director
Mr McPartland is managing director of Reacta Biotech Limited, a Manchester based start-up. A graduate pharmacologist, he worked as an investment analyst before joining Schroder Ventures, and then becoming a co-founder and general partner of SV Life Sciences. He has been a director of a number of leading companies in the field, including Shire Pharmaceuticals, Chiroscience and Triangle Pharmaceuticals.