Redx rescue deal in the works

The administrators of drug discovery and development company Redx have said they are working on a rescue deal to return control of the company to its directors.

Redx’s shares were suddenly suspended on AIM last month, when Jason Baker and Miles Needham of FRP Advisory were appointed as joint administrators.

They were called in by Liverpool City Council following an ongoing dispute over a £2m loan that matured at the end of March.

The administrators have today said that they are working with the company’s advisers on proposals to rescue Redx and return the company to the control of its directors, with the intention of lifting the suspension and restoring trading in the ordinary shares.

However they cautioned that discussions are at a relatively early stage and there can be no guarantee that these will be concluded successfully in the short term.

Liverpool Council’s fall out with the company came after it relocated from Liverpool to Alderley Park in Cheshire towards the end of last year.

It claimed the company had shown “no willingness to make any repayment of any size” on a £2m investment loan made in 2012 to support its business expansion plans in the city.

Redx, meanwhile, said it has offered to make an immediate payment of £1m and the remaining £1m within seven days and that it cound not fathom the council’s sudden, aggressive change in stance.

The company, which had 84 staff, was working on new treatments for patients suffering with cancer and fibrotic diseases and has two oncology programs which are due to soon start clinical development.

It listed on AIM in March 2015, raising £15m. Since then it has raised a further £22m through share placings, the most recent being in March.

But the drug development company has also seen its half year losses widen to £10.7m and earlier this month said a strategic refocus of the business is expected to deliver annual cost savings of almost half that amount in the future.