Drug discovery firm secures £26.3m of new funding minutes after takeover was pulled
Cheshire drug discovery business Redx Pharma has unveiled a new £26.3m funding package.
The announcement this evening (February 28) came less than two hours after a potential takeover of Redx was pulled.
The Alderley Park-based pharma company, focused on cancer and fibrosis treatments, revealed on December 31, that it was in discussions with Samuel D. Waksal and associates in relation to a possible cash offer to be made by an investment syndicate for the entire issued, and to be issued, share capital of Redx.
It was part of an announcement on the group’s ongoing plans to strengthen its balance sheet.
Chairman, Iain Ross, explained at the time: “As we have previously disclosed, the board has been in active discussions with shareholders and third-party healthcare specialist investors regarding longer-term funding of Redx.
“For our conversations to continue, we are asking shareholders to agree to the capitalisation of the £2.5m loan, that we announced in June, into ordinary shares.
“We believe that this short-term funding solution will allow us time to secure the necessary longer-term funding that will enable us to advance our innovative pipeline of novel precision medicines for cancer and fibrosis.
“We have been encouraged by these discussions, and one investor group has indicated that ongoing discussions could lead to a possible cash offer for the company.”
Those discussions were extended twice, the most recent being on February 14, when Redx said “significant progress” had been made in discussions with the bidder. The process was extended to 5pm, on February 28.
It also revealed that Redx had continued dialogue with shareholders and third-party healthcare specialist investors regarding longer-term funding, as well as considering options to monetise certain assets in the portfolio.
It said: “Significant progress has been made and the board is looking to extend the company’s working capital position beyond the end of March 2020, through short-term debt financing.”
But shortly before 5pm this afternoon the bid vehicle, Yesod, made a stock exchange announcement that confirmed it did not intend to make an offer for the Redx shares.
At 6.30pm Redx announced that Redmile Group, a large and well-funded US-based specialist healthcare and life sciences investment firm, has confirmed to the board that it, together with Sofinnova Partners, will provide up to £26.3m of funding to Redx.
Redmile said it will provide Redx with £5m of short-term debt funding.
Iain Ross said: “The board is pleased that it is able to bring this period of uncertainty regarding an offer for the company to an end.
“We believe that with Redmile and Sofinnova Partners support we will be able to secure a way forward for the company that delivers better value for shareholders.
“We are delighted that MGL, which has provided the company with robust support, particularly throughout the last three years, continues to share our vision to build a significant enterprise and that Redmile and Sofinnova Partners, both established and sophisticated investors in the healthcare/biotech sector, wish to support the company.”
Jeremy Green, founder and portfolio manager of Redmile Group, said: “Redx, with its deep expertise in medicinal chemistry, has a proven track record of designing high quality, commercially-attractive molecules that have the potential to be effective drugs to treat significant unmet medical conditions.
“We are delighted to partner with Redx in the next phase of growth of the company.”
