Redx Pharma Regulatory News (REDX)

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FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN REDX PHARMA PLC IN ANY JURISDICTION.

THE SECURITIES DISCUSSED HEREIN MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. ADDITIONALLY, THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER SECURITIES COMMISSION OR REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE SUBSCRIPTION. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

Redx Pharma plc

("Redx" or "the Company")

Proposed Subscription to raise c.£14.1 million

Alderley Park, 18 October 2023 - Redx Pharma plc (AIM: REDX), the clinical-stage biotechnology company focused on discovering and developing novel, small molecule, targeted therapeutics for the treatment of fibrotic disease and cancer, today announces that it has conditionally raised c.£14.1 million (before expenses) by way of a subscription for 54,074,458 new Ordinary Shares (the "Subscription Shares") by existing shareholders (the "Subscription"). The Subscription, which is subject to certain conditions, will be effected at a price of 26 pence per Subscription Share (the "Issue Price"), being the closing market price on 17 October 2023 (the business day prior to the date of this announcement). The net proceeds of the Subscription will allow the Company to continue to progress its pipeline, as detailed further below.

MTS Securities, LLC is acting as exclusive placement agent (the "Exclusive Placement Agent") in connection with the Subscription.

Dr Jane Griffiths, Chair of the Board of Directors commented:

"At Redx we are focussed on developing novel, targeted therapies for fibrotic disease and cancer in areas of high unmet medical need. This fundraise enables us to continue the strong progress of our industry-leading ROCK portfolio, specifically advancing our ROCK2-selective inhibitor, zelasudil, in idiopathic pulmonary fibrosis (IPF) and commencing clinical studies for our gastrointestinal-targeted ROCK inhibitor, RXC008, which has the potential to be a first-in-class treatment for fibrostenotic Crohn's disease.

We would like to thank our existing shareholders for their continued strong support of Redx and our ambition to create world leading medicines to transform patients' lives."

Highlights of the Transaction

· Subscription of c.£14.1 million (before expenses) at the Issue Price by existing shareholders.

· One of the Redmile Funds, which taken together are the Company's largest shareholder, is participating in the Subscription and has agreed to subscribe for 31,548,692 Subscription Shares at the Issue Price. Sofinnova Partners, an existing Shareholder, is also participating in the Subscription and has agreed to subscribe for 7,887,173 Subscription Shares at the Issue Price. In addition, Polar Capital and Invus, both existing shareholders of the Company, are also participating in the Subscription, either directly or through entities in their respective groups.

· Following completion of the Subscription, the Company estimates that it will have available cash of approximately £28.1 million which is expected to provide the Company with working capital in order to fund the anticipated progression of its ROCK portfolio to important value inflection points in 2024, thereby continuing the delivery of its stated strategy to drive shareholder value.

· Redx expects to use the net proceeds of the Subscription, its existing cash resources and a risk-adjusted forecast of milestone income from partnered programmes due before the end of 2024 as follows:

o report topline Phase 2a data from zelasudil IPF clinical trial which will include early efficacy, safetyand PK/PD data;

o complete additional investigative preclinical studies for zelasudil to enable a complete response to the FDA partial clinical hold, allowing for longer dosing durations in the US;

o progress RXC008 into clinical development in fibrostenotic Crohn's disease by initiating a Phase 1 study in healthy volunteers;

o report topline Phase 2 data from PORCUPINE and PORCUPINE2 clinical trials of RXC004 as a combination therapy with immune checkpoint inhibitors in patients with genetically selected MSS mCRC and unselected biliary tract cancer;

o continue to explore partnerships to advance certain programmes from the Redx portfolio; and

o for general and administrative working capital into the third quarter of 2024.

The issue of the Subscription Shares is conditional, inter alia, on the passing by Shareholders of certain resolutions at a General Meeting of the Company, which is being convened at the offices of Cooley (UK) LLP, 22 Bishopsgate, London EC2N 4BQ on 6 November 2023 at 11:00 a.m. (London time). Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Admission").

Related Party Transaction

As the Redmile Funds hold 73.26 per cent. of the Existing Ordinary Shares, Redmile is a related party of the Company pursuant to the AIM Rules. In addition, as Sofinnova holds 13.16 per cent. of the Existing Ordinary Shares, Sofinnova is also a related party of the Company pursuant to the AIM Rules. Consequently, the participation of Redmile via its fund, RedCo II, and Sofinnova in the Subscription constitute related party transactions for the purposes of AIM Rule 13. The independent directors for the purposes of this transaction (being all Directors other than Natalie Berner, who is a representative of Redmile and Dr Joseph Anderson, who is a representative of Sofinnova) consider, having consulted with Spark, the Company's nominated adviser, that the terms of (i) RedCo II's subscription for Subscription Shares in the Subscription and (ii) Sofinnova's subscription for Subscription Shares in the Subscription are fair and reasonable in so far as Shareholders are concerned.

Set out below in Appendix I to this Announcement (which forms part of this Announcement) is an adapted extract from the Circular proposed to be sent to Shareholders. The Circular, containing the Notice of General Meeting, will be posted to shareholders later today and will also be available from the Company's website at: www.redxpharma.com.

The capitalised terms not otherwise defined in the text of this Announcement are defined in Appendix II and the glossary is contained at Appendix III. The expected timetable of principal events is set out in Appendix IV.

This Announcement should be read in its entirety.

The person responsible for the release of this Announcement on behalf of the Company is?Nischal Hindia, Interim General Counsel & Company Secretary.

For further information, please contact:

About Redx Pharma Plc

Redx Pharma (AIM: REDX) is a clinical-stage biotechnology company focused on the discovery and development of novel, small molecule, targeted therapeutics for the treatment of fibrotic disease, cancer and the emerging area of cancer-associated fibrosis, aiming initially to progress them to clinical proof of concept before evaluating options for further development and potential value creation. The Company's lead fibrosis product candidate, the selective ROCK2 inhibitor, zelasudil (RXC007), is in development for interstitial lung disease and is undergoing a Phase 2a trial for idiopathic pulmonary fibrosis (IPF) with topline data expected in H1 2024. The Company's second fibrosis candidate, RXC008, a GI-targeted ROCK inhibitor for the treatment of fibrostenotic Crohn's disease, is progressing towards a CTA application during the fourth quarter of 2023. Redx's lead oncology product candidate, the Porcupine inhibitor RXC004, being developed as a targeted treatment for Wnt-ligand dependent cancers, is expected to report anti-PD-1 combination Phase 2 data during the first half of 2024, following which Redx will seek a partner for ongoing development.

The Company has a strong track record of discovering new drug candidates through its core strengths in medicinal chemistry and translational science, enabling the Company to discover and develop differentiated therapeutics against biologically or clinically validated targets. The Company's accomplishments are evidenced not only by its wholly-owned clinical-stage product candidates and discovery pipeline, but also by its strategic transactions, including the sale of pirtobrutinib (RXC005, LOXO-305), a non-covalent (reversible) BTK inhibitor now approved by the US FDA for adult patients with mantle cell lymphoma previously treated with a covalent BTK inhibitor, and AZD5055/RXC006, a Porcupine inhibitor targeting fibrotic diseases including IPF, which AstraZeneca is progressing in a Phase 1 clinical study. In addition, Redx has forged collaborations with Jazz Pharmaceuticals, which includes JZP815, a pan-RAF inhibitor developed by Redx which Jazz is now progressing through Phase 1 clinical studies, and an early stage oncology research collaboration.

This Announcement should be read in its entirety.

Important Notice

This Announcement and the information contained in it is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States, Canada, Australia, Japan or the Republic of South Africa or any other jurisdiction in which the same would constitute a violation of the relevant laws or regulations of that jurisdiction (each, a "Restricted Jurisdiction"). The offering of securities mentioned herein have not been, and will not be, registered under the U.S. Securities Act. The Subscription Shares may not be offered or sold in the United States, except pursuant to an exemption from the registration requirements of the U.S. Securities Act or pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission. There will be no public offer of securities of the Company in the United States.

This Announcement has been issued by, and is the sole responsibility, of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by MTS Securities, LLC ("MTS") or by any of their respective affiliates, directors, officers, employees, advisers or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. MTS has not authorised the contents of, or any part of, this Announcement.

MTS is acting exclusively for the Company and no-one else in connection with the Subscription and will not regard any other person as a client in relation to such matters and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to such matters. The responsibilities of SPARK Advisory Partners Limited ("SPARK") as nominated adviser to the Company are owed to the London Stock Exchange and the Company and not to any other person including, without limitation, in respect of any decision to acquire Subscription Shares in reliance on any part of this Announcement.

No public offering of Subscription Shares is being made in the United Kingdom, any Restricted Jurisdiction or elsewhere. The distribution of this Announcement and the offering of the Subscription Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or MTS that would permit an offering of such Subscription Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Subscription Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and MTS to inform themselves about, and to observe, such restrictions.

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the U.S. Securities Act or the applicable laws of other jurisdictions.

There are matters set out within this Announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. Neither the Company or MTS undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a pro?t forecast or pro?t estimate or to imply that the earnings of the Company for the current or future ?nancial periods will necessarily match or exceed the historical or published earnings of the Company. The price of the Company's Ordinary Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Company's Ordinary Shares.

This Announcement is not an offering document, prospectus, prospectus equivalent document or AIM admission document. It is expected that no offering document, prospectus, prospectus equivalent document or AIM admission document will be required in connection with the Subscription and no such document has been or will be prepared or submitted to be approved by the Financial Conduct Authority or submitted to the London Stock Exchange in relation to the Subscription.

Neither the content of the Company's website nor any links on the Company's website is incorporated in, or forms part of, this Announcement.

APPENDIX I: EXTRACTS FROM THE CIRCULAR

Background to and reasons for the Subscription

Redx is a clinical-stage biotechnology company founded in 2010 and whose Ordinary Shares have traded on AIM since 2015. The Company is focused on discovering and developing novel, small molecule, targeted therapeutics for the treatment of fibrotic disease and cancer, including the emerging area of cancer-associated fibrosis, that address significant unmet medical needs. Redx's core strengths in medicinal chemistry and translational science have enabled the Company to discover and develop differentiated, novel compounds against biologically or clinically validated targets. In particular, this expertise has led to the development of a differentiated portfolio of Rho Associated Coiled-Coil Containing Protein Kinase (ROCK) inhibitors, as potentially either best-in-class or first-in-class drug candidates and Redx has made substantial progress with its wholly-owned clinical and preclinical stage pipeline. Moving forward, Redx will prioritise developing its ROCK portfolio through various clinical stage studies, and will pursue partnerships for the remaining pipeline candidates, including RXC004 and programmes in the discovery portfolio.

ROCK Portfolio

Redx's lead fibrosis product, zelasudil (RXC007), is a highly selective Rho Associated Coiled-Coil Containing Protein Kinase 2 (ROCK2) inhibitor being developed as a potential best-in-class treatment in fibrosis. ROCK2 is a biologically and clinically validated target that has been shown to sit at a nodal point in a cell signalling pathway thought to be central to fibrosis. As a selective ROCK2 inhibitor, zelasudil has the potential to treat several fibrotic diseases across various therapeutic areas, including Idiopathic Pulmonary Fibrosis (IPF) and other progressive fibrotic interstitial lung diseases (ILD), in highly fibrotic tumours such as pancreatic cancer, and in widespread multi-organ fibrosis, such as chronic Graft versus Host Disease (cGvHD). Zelasudil has demonstrated robust preclinical anti-fibrotic effects across multiple industry-standard in vivo preclinical models. In the Phase 1 healthy volunteer study the compound was well tolerated and demonstrated dose dependent exposure in man at doses predicted to deliver efficacy. IPF is being targeted as the first indication for clinical development, and a Phase 2a clinical study in IPF initiated in the fourth quarter of 2022, with topline clinical data expected to be reported in the first half of 2024. IPF is a severe and life-threatening chronic lung condition, with limited treatment options, which is estimated by GlobalData to affect 170,000 patients globally. IPF has an addressable market opportunity estimated to be worth $3.6 billion by 2029.

Redx's second ROCK asset and next clinical development candidate is RXC008, a Gastrointestinal (GI) targeted ROCK inhibitor being developed as a potential first-in-class treatment for fibrostenotic Crohn's disease. Crohn's disease affects 1.7 million people globally and over 70,000 new cases are diagnosed each year. More than 50 per cent. of patients with Crohn's disease develop significant fibrosis and stricture formation within ten years after diagnosis. The current management of fibrotic strictures of the gastrointestinal tract is primarily surgical as no drugs are specifically approved for fibrosis, which can progress despite intervention with anti-inflammatory therapies. RXC008 is a small molecule designed to have its action within the GI tract, the site of the fibrotic strictures in Crohn's disease. Any absorbed RXC008 is quickly degraded by enzymes present in the bloodstream thereby avoiding systemic exposure. Preclinical data in multiple models of inflammatory bowel disease show robust preclinical efficacy, including complete reversal of fibrosis in one of the models. Redx intends to submit a CTA application during the fourth quarter of 2023 which would allow for the commencement of a Phase 1 clinical trial in the first half of 2024. The proposed Phase 1 study will be split into three parts which will initially involve single ascending dose and multiple ascending dose cohorts of healthy volunteers before moving into the third part with a limited number of patients with fibrostenotic Crohn's disease. The Phase 1 study is designed to monitor safety and to confirm minimal systemic exposure, as well as demonstrating target engagement in the gastrointestinal tract. Beyond this, Redx has provisional plans for a Phase 2 proof-of-concept study which has been designed with expert input from a Clinical Advisory Board, including members from the Science, Translational & Clinical Andrology Research Consortium, and will be subject to input from regulatory authorities.

Programmes for Partnership

Redx's clinical stage oncology product, RXC004, is a highly potent, orally active Porcupine inhibitor being developed as a targeted therapy for Wnt-ligand dependent cancer. Porcupine is a key enzyme in the Wnt signalling pathway, well established as a key driver of both tumour growth and immune evasion. Redx has completed recruitment in two multi-arm Phase 2 clinical studies in patients with Wnt-ligand dependent solid tumours as both a monotherapy, and in combination with anti-PD-1 immune check point inhibitors and expects to report topline data during the first half 2024 following which Redx will seek a partner for ongoing development. In the Phase 2 programme, Redx is evaluating RXC004 in genetically selected MSS mCRC as a monotherapy and in combination with nivolumab, an immune checkpoint inhibitor, as a monotherapy in genetically selected pancreatic cancer, and as a monotherapy and in combination with an anti-PD-1, pembrolizumab, in unselected biliary tract cancer. All three of these cancer types have high unmet need with limited treatment options and poor 5-year survival rates of less than 3 per cent. for biliary and pancreatic cancer and 14 per cent. for MSS mCRC.

Redx's Discoidin Domain Receptor (DDR) inhibitor programme reached the key milestone of development candidate nomination, as RXC009, in October 2023. DDRs have recently gained traction as new druggable targets with the potential to treat multiple fibrotic conditions, including kidney fibrosis and Redx plans to present data on the programme at the upcoming American Society of Nephrology (ASN) Kidney Week meeting.

The Company's major focus for oncology research is a Kirsten rat sarcoma viral oncogene (KRAS) inhibitor programme, targeting both G12D selective and multi-KRAS profiles. RAS is the most frequently mutated oncogene across different cancer types, with KRAS mutations accounting for approximately 85 per cent. of these mutated oncogenes. Therefore, KRAS inhibitors targeting multiple commonly occurring mutations may offer a treatment option for large segments of colorectal, pancreatic and lung cancer patients for whom treatment options are currently limited. This programme is in lead optimisation.

The Company has a very experienced management team led by Lisa Anson, a well-respected and experienced industry executive and former President of AstraZeneca in the UK and the ABPI and under her leadership, the management team have established a focused strategy aimed at driving shareholder value. Redx's ambition is to create world leading medicines to transform patients' lives by becoming a leading biotech company focused on the development of novel and differentiated targeted medicines. As Redx will now prioritise clinical development of its ROCK inhibitor portfolio, the Company will seek to leverage its strength in medicinal chemistry and proven discovery engine through establishing partnerships.

Since 2019, Redx has completed three notable partnership deals, two with Jazz Pharmaceuticals and one with AstraZeneca, with total remaining potential milestone payments to Redx of approximately $755 million plus mid-single digit revenue royalties. From these programmes, Redx has near-term potential milestones of $15 million and has also identified a number of additional programmes, including RXC004, for partnership.

Notable Achievements

ROCK Portfolio

Zelasudil

· On 11 October 2022, Redx announced that the first patient had been dosed in a Phase 2a IPF clinical trial, which has regulatory approval in the UK and seven other European countries. This 12-week multi-cohort, randomised, double-blind, placebo-controlled dose ranging study will provide early efficacy readouts, safety and tolerability in IPF patients with or without standard IPF therapy. Currently, the first cohort of patients has completed dosing at 20 mg BID, with no safety or tolerability findings that precluded dose escalation, and with 10 of the 16 patients dosed electing to continue into the open label extension to allow for an additional 12-weeks of dosing. The second cohort of patients being treated with 50 mg BID is currently recruiting and it is expected that recruitment into the third cohort of the trial will be completed by the end of 2023, allowing topline data to be announced during the first half of 2024.

· On 21 August 2023, Redx announced that the US FDA had granted zelasudil Orphan Drug Designation for the treatment of IPF. The designation provides Redx with various development and commercial incentives, including market exclusivity, in order to address this unmet need for patients.

· Redx has an open IND in the US for zelasudil, however, dosing for longer than 28 days is currently under an FDA partial clinical hold based on skeletal muscle findings in dog toxicology studies. Redx has clear guidance from the FDA on the study requirements to resolve the partial clinical hold. In addition to sharing the results from a long term non-clinical dog toxicity study at clinically relevant doses, the Company has decided to undertake a 13-week investigative dog study to specifically address the FDA's guidance to show that the toxicity in dog skeletal muscle is monitorable and reversible. The Company has recently met with the FDA regarding this study design. Redx believe that the dog is a highly sensitive species for this observation as no muscle toxicity was observed in mice following treatment with zelasudil at very high exposures for up to 26-weeks, and no muscle related adverse events nor creatine kinase (CK) rises, a biomarker of muscle damage, have been observed in humans to date. It is expected that a complete response will be submitted to the FDA during the second quarter of 2024 which could allow the partial hold to be lifted, enabling longer-term dosing in subsequent clinical studies in the US.

· Redx has presented preclinical data at a number of significant scientific conferences which supports the development of zelasudil in other indications including fibrotic oncology. On 11 May 2023, Redx presented preclinical data at the Resistant Tumour Microenvironment, Keystone Symposia, which showed that zelasudil, in combination with gemcitabine/Abraxane® in metastatic and high-extra cellular matrix (ECM) patient-derived PDAC models, increased survival compared to single agent standard of care alone. This, taken together with other preclinical data generated, has shown the potential of zelasudil in combination with standard of care as a potential treatment for cancer-associated fibrosis which Redx intends to investigate further in highly fibrotic tumours such as pancreatic cancer, in a future Phase 1 study.

· Additionally, on 2 October 2022, Redx presented data at the International Colloquium on Lung and Airway Fibrosis (ICLAF) conference from murine bleomycin-induced lung fibrosis and murine sclerodermatous chronic graft versus host disease (GvHD) models which have similar underlying disease mechanisms to those observed in auto-immune driven fibrotic diseases such as systemic sclerosis and interstitial lung disease (ILD). With this preclinical data showing positive results, Redx also intends to initiate a Phase 2a study in cGvHD, where there is a clear route to approval and a significant market opportunity, in the future.

RXC008

· On 30 March 2022, RXC008, was nominated as a clinical development candidate as a potential first-in-class treatment for fibrostenotic Crohn's disease.

· On 23 November 2022, Redx presented data at the Inflammatory Bowel Disease Nordic (IBD Nordic) conference showing the effect of RXC008 in supressing fibrosis and tissue injury in pre-clinical models of Crohn's disease. The data showed that RXC008 can suppress fibrosis and attenuate tissue injury in animal models of GI-fibrosis and has the potential to be developed as a novel therapy to inhibit fibrotic stricture formation in Crohn's disease.

· On 21 February 2023, a Scientific Advisory Board was held between Redx and key opinion leaders in fibrostenosis in Crohn's disease to review the Phase 1 study proposal, including the population for patient part of the study, and to discuss overall clinical development proposals and potential study designs beyond Phase 1.

· On 07 August 2023, Redx completed a scientific advisory meeting with the MHRA, to review the data which will support a CTA submission. This included data on drug substance and drug product specifications, the preclinical toxicology package and the proposed Phase 1 study design (including predictions for starting dose in humans, dose escalation and stopping criteria proposals) all of which were endorsed by the MHRA.

· The package to support a CTA submission is complete and a Phase 1 study protocol prepared. Redx is planning to submit a CTA package in the fourth quarter of 2023 to enable a Phase 1 Healthy Volunteer Study to commence in the first half of 2024. Subsequently, Redx intends to submit an IND to allow for US participation in future patient studies.

Programmes for Partnering

RXC004

· On 17 May 2023, Redx announced its intention to partner the RXC004 programme following the data readout from the Phase 2 combination with anti-PD-1 modules in genetically selected MSS mCRC and pancreatic cancer. Recruitment into these modules is now closed, with some modules having smaller numbers than original targets for feasibility reasons. A topline data readout is expected during the first half of 2024.

· On 8 March 2023, Redx announced topline data from the Phase 2 monotherapy module in advanced biliary tract cancer from 16 previously treated patients enrolled in the PORCUPINE2 study, the primary endpoint of which was progression free survival at six months. The initial data showed some patients received durable clinical benefit from RXC004, consistent with clinical activity seen in the earlier Phase 1 trial, which Redx believes is notable given few drugs have received regulatory approval as single agents in this treatment setting. The emerging single agent profile of the RXC004 data reported to date is supportive of the primary efficacy hypothesis in combination with anti-PD-1, and Redx therefore believe that the most suitable development path for this programme is to partner with a Company that can further progress its development in combination with anti-PD-1 and other potential combination treatment options.

Discovery

· On 27 October 2022, Redx presented data from its novel Discoidin Domain Receptor 1 (DDR1) inhibitor programme in chronic kidney disease models at the American Society of Nephrology (ASN) Kidney Week. The data presented showed that inhibition of DDR with REDX12271 reduced inflammation and fibrosis in Unilateral Ureteral Obstruction Models. Redx has since continued to advance this programme towards development candidate status, which was reached in October 2023 with the nomination of RXC009. RXC009 is being developed for kidney fibrosis, including as a potential treatment for Alport syndrome. Further data are being presented at the 2023 ASN meeting later this year, following which the Company intends to partner the programme for further development. Redx has filed multiple patents claiming distinct chemical series as inhibitors of DDR.

· Redx has filed multiple patents applications claiming distinct chemical series with KRAS activity. To date, Redx has generated encouraging early data and is continuing to further expand the preclinical data package.

Partnered Programmes

· Redx has a successful track-record in establishing meaningful partnerships with large pharmaceutical companies. Currently, Redx has three partnerships ongoing with Jazz Pharmaceuticals and AstraZeneca, with near-term potential milestones of $15 million and total potential remaining milestones of $755 million, as well as royalties from these ongoing partnerships:

o On 9 November 2022, Jazz Pharmaceuticals announced that the first patient had been dosed in the Phase 1 trial of JZP815, the pan-RAF inhibitor programme developed by Redx and acquired by Jazz Pharmaceuticals in 2019. To date, $11.5 million of milestones payments have been received from this programme.

o RXC006 / AZD5055, a Porcupine inhibitor in development for fibrotic diseases was licensed to AstraZeneca in 2020 with $17 million in milestones being received to date. AstraZeneca continue to progress this programme through Phase 1 studies.

o Redx has a further research collaboration with Jazz Pharmaceuticals for discovery and preclinical development for targeted cancer therapies on the Ras/RAF/MAP kinase pathway. One target under this collaboration was discontinued in June 2022 due to pipeline prioritisation by Jazz, while the second programme continues to advance towards an IND application. Redx has received $20 million in milestone payments to date from this partnership.

Redx's track record in discovering and developing novel, small-molecule targeted therapeutics was further validated on 23 January 2023, when the Redx discovered pirtobrutinib, (Jaypirca?) a highly selective kinase inhibitor became the first and only FDA approved non-covalent (reversible) BTK inhibitor available. Pirtobrutinib was sold to Loxo Oncology, now part of Eli Lilly, in 2017 and Redx has no remaining economic interest.

The Company has sufficient resources to fund its priority programmes into 2024 and through near-term milestones. However, Redx requires additional capital to fund its currently active and planned clinical development activity. In particular, this includes the ongoing work required to enable a complete response to the FDA in relation to the partial clinical hold in respect of zelasudil and moving RXC008 into a Phase 1 clinical programme. The Board believes that the Subscription is in the best interests of Shareholders in order to provide further cash resources to fund the Company's strategic plan and to provide flexibility when considering options upon data readouts in order to determine the optimal route for value creation for Shareholders. Furthermore, strong support from existing investors through the Subscription provides additional confirmation and evidence of the strength of the Company's assets and focused strategy.

Size of the Subscription and Use of Proceeds

Through the Subscription, the Company has conditionally raised gross proceeds of £14,059,359 (the sterling equivalent of $17,140,000 as at 17 October 2023) in order to fund the anticipated progression of its ROCK portfolio to important value inflection points in 2024, thereby continuing the delivery of its stated strategy to drive shareholder value. Redx expects to use the net proceeds of the Subscription, its existing cash resources and a risk-adjusted forecast of milestone income from partnered programmes due before the end of 2024 as follows:

· Report topline Phase 2a data from zelasudil IPF clinical trial which will include early efficacy, safety and PK/PD data;

· Complete additional investigative preclinical studies for zelasudil to enable a complete response to the FDA partial clinical hold, allowing for longer dosing durations in the US;

· Progress RXC008 into clinical development in fibrostenotic Crohn's disease by initiating a Phase 1 study in healthy volunteers;

· Report topline Phase 2 data from PORCUPINE and PORCUPINE2 clinical trials of RXC004 as a combination therapy with immune checkpoint inhibitors in patients with genetically selected MSS mCRC and unselected biliary tract cancer;

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· Continue to explore partnerships to advance certain programmes from the Redx portfolio; and

· For general and administrative working capital into the third quarter of 2024.

As the Company executes its business plan, the Board and management will continue to ensure that resources are allocated to allow progression of the project portfolio in the most efficient way and to assess options on an ongoing basis to ensure that Redx extracts maximum value from its intellectual property. Following completion of the Subscription, the Company estimates that it will have available cash of approximately £28.1 million.

Current Financial Summary

On 17 May 2023, Redx announced its unaudited interim results for the six months ended 31 March 2023. Financial highlights for the period included net cash of £34.6 million (31 March 2022: £31.6 million); a loss for the period of £16.1 million (six months ended 31 March 2022: £9.8 million loss) and total research and development expenditure of £16.1 million (six months ended 31 March 2022: £12.9 million).

Details of the Subscription

Structure and Principal Terms of the Subscription

Pursuant to the Subscription Agreement, the Subscribers, being existing Shareholders, have conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue, in aggregate, 54,074,458 Subscription Shares representing gross proceeds of £14,059,359 million (the sterling equivalent of $17,140,000 as at 17 October 2023).

The Subscription for the Subscription Shares is conditional, inter alia, on the following:

(i) Resolutions 1 and 3 being passed at the General Meeting;

(ii) in respect of each Subscriber, the representations and warranties of such Subscriber in the Subscription Agreement being true and correct as of the date when made and as of the Closing Date as though made at that time, and all obligations, covenants and agreements of such Subscriber required to be performed at or prior to the Closing Date having been performed;

(iii) the representations and warranties of the Company in the Subscription Agreement being true and correct in all material respects (except for those which are by their terms qualified by materiality which shall be true, correct and complete in all respects) as of the Closing Date as though made at that time, and all obligations, covenants and agreements of the Company and any Group Company required to be performed at or prior to the Closing Date having been performed; and

(iv) Admission having occurred.

The Company has agreed to pay to MTS certain commissions based on the aggregate value of the Subscription Shares placed to certain investors at the Issue Price and to pay the expenses incurred in relation to the Subscription.

Application for Admission

Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM. Admission is expected to take place, and dealings on AIM are expected to commence, at 8:00 a.m. on 7 November 2023.

Effect of the Subscription

The Subscription Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after Admission. Upon completion of the Subscription, the Subscription Shares will represent approximately 13.9 per cent. of the Enlarged Share Capital.

A summary of the Subscription Agreement is set out in paragraph 3 of Part II (Additional Information) of the Circular.

Related Party Transaction

As the Redmile Funds hold 73.26 per cent. of the Existing Ordinary Shares, Redmile is a related party of the Company pursuant to the AIM Rules. In addition, as Sofinnova holds 13.16 per cent. of the Existing Ordinary Shares, Sofinnova is also a related party of the Company pursuant to the AIM Rules. Consequently, the participation of Redmile via its fund, RedCo II and Sofinnova in the Subscription constitute related party transactions for the purposes of AIM Rule 13. The independent directors for the purposes of this transaction (being all Directors other than Natalie Berner, who is a representative of Redmile and Dr Joseph Anderson, who is a representative of Sofinnova) consider, having consulted with Spark, the Company's nominated adviser, that the terms of (i) RedCo II's subscription for Subscription Shares in the Subscription and (ii) Sofinnova's subscription for Subscription Shares in the Subscription are fair and reasonable in so far as Shareholders are concerned.

General Meeting

The Directors do not currently have sufficient authority to allot in full the Subscription Shares. Accordingly, the Board is seeking the approval of the Shareholders to allot the Subscription Shares at the General Meeting, together with approval to disapply pre-emption rights.

A notice convening the General Meeting, which is to be held at 11:00 a.m. on 6 November 2023 at the offices of Cooley (UK) LLP, 22 Bishopsgate, London EC2N 4BQ, is set out in the Circular. At the General Meeting, the following Resolutions will be proposed:

Resolution 1 - An ordinary resolution to authorise the Directors to allot Ordinary Shares up to an aggregate nominal amount of £540,744.58 being equal to 54,074,458 Subscription Shares.

Resolution 2 - An ordinary resolution to authorise the Directors to:

(i) allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount which represents one third of the Enlarged Share Capital; and

(ii) allot equity securities in connection with a rights issue in favour of (i) holders of ordinary shares in proportion to their respective holdings of ordinary shares; and (ii) to holders of other equity securities as required by the rights attached to those securities or as the Directors otherwise consider necessary up to a maximum nominal amount which represents one third of the Enlarged Share Capital.

This Resolution is conditional upon Admission and will replace the equivalent authorities granted at the Company's annual general meeting held on 14 March 2023.

Resolution 3 - A special resolution to authorise the Directors to allot the Subscription Shares, pursuant to the authority conferred on them by Resolution 1, and to dis-apply statutory pre-emption rights in respect of the allotment of such shares, as if section 561 of the Act did not apply to such allotment. This Resolution is conditional upon the passing of Resolution 1.

Resolution 4 - A special resolution to authorise the Directors generally to allot and issue equity securities for cash pursuant to the authority conferred on them by Resolution 2, up to an aggregate nominal amount which represents 10 per cent. of the Enlarged Share Capital. This Resolution is conditional upon Admission and the passing of Resolution 2 and will replace the equivalent authorities granted at the Company's annual general meeting held on 14 March 2023.

The authorities and the powers described in Resolutions 1 and 3 above will (unless previously revoked or varied by the Company in general meeting) expire on the date 3 months from the passing of such Resolutions or at the conclusion of the next annual general meeting of the Company following the passing of the Resolutions, whichever occurs first. The authorities and the powers described in Resolutions 2 and 4 above will (unless previously revoked or varied by the Company in general meeting) expire on the date 15 months from the passing of such Resolutions or at the conclusion of the next annual general meeting of the Company following the passing of the Resolutions, whichever occurs first. The authority and the power described in Resolutions 1 and 3 above are in addition to any like authority or power previously conferred on the Directors. The authority and the power described in Resolutions 2 and 4 above are in substitution for the authority and power previously conferred on the Directors pursuant to the like resolutions (being resolutions 6 and 7) passed at the Company's annual general meeting held on 14 March 2023.

Resolutions 1 and 2 are ordinary resolutions and require a simple majority of those voting in person or by proxy to vote in favour of the Resolutions. Resolutions 3 and 4 are special resolutions and will require approval by not less than 75 per cent. of the votes cast by Shareholders voting in person or by proxy.

Irrevocable Undertakings and Letters of Intent

The Directors, who in aggregate hold 394,154 Ordinary Shares, representing approximately 0.12 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to vote in favour of the Resolutions at the General Meeting.

In addition, the Company has received letters of intent from RedCo II, RM3, Sofinnova, Polar Capital Funds Plc - Healthcare Opportunities Fund and Invus Public Equities, L.P., who in aggregate hold 314,731,169 Ordinary Shares representing approximately 93.97 per cent. of the Existing Ordinary Shares, confirming that each of such shareholders intends to cast, or procure that all the votes attaching to the Ordinary Shares held by such Shareholders are cast, in favour of the Resolutions at the General Meeting.

APPENDIX II: DEFINITIONS

The following definitions apply throughout this Announcement, unless the context otherwise requires:

APPENDIX III: GLOSSARY

APPENDIX IV: EXPECTED TIMETABLE OF PRINCIPAL EVENTS

If any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of a Regulatory Information Service announcement.

In this Announcement, all references to times and dates are to times and dates in London, United Kingdom unless otherwise stated. The timetable above assumes that Resolutions 1 and 3 are passed at the General Meeting without amendment.