Redx drug programme sale will lift it out of administration
The administrators of drug discovery company Redx Pharma have agreed to sell one of its development programmes to a US-based biotechnology company for £30.5m.
The sale will allow for all creditors to be paid and provide enough working capital to return the business to solvency.
Joint administrators Jason Baker and Miles Needham of FRP Advisory will sell certain patents, intellectual property, contracts for product manufacture, and physical materials relating to Redx’s BTK inhibitor drug development program to NASDAQ-quoted Loxo Oncology.
Baker said the disposal was part of a wider strategy to rescue the company, after he and Needham were appointed administrators in May and shares in the AIM-listed company were suspended.
He said: “The administrators anticipate that, upon their review and approval of the management’s final business plan, the company will be set to exit administration. Upon exit from administration the directors of the company will be in a position to request the lifting of the suspension of the company’s shares from trading on AIM.
“Until the exit from administration we shall continue with the discharge of our statutory duties as administrators in the interests of all creditors.”
Admimistrators were called in by Liverpool City Council following an ongoing dispute over a £2m loan that matured at the end of March.
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 had two oncology programs which were 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.
