Redx seeks further funding after revenues fall and losses widen
Cheshire drugs discovery firm, Redx Pharma, reported lower revenues and deeper losses in the six months to March 31, 2023.
The company, which focuses on the treatment of cancer and fibrotic disease, saw sales slashed from £8.353m in the corresponding period a year ago, to £2.311m.
Consequently, pre-tax losses rose from £9.682m to £20.647m. It said this was due to the lower revenues, higher R&D expenses, and costs associated with the collapse of its proposed $425m merger with US-based Jounce Therapeutics.
Cash balance at March 31, 2023, stood at £34.6m, up from £31.6m a year ago, which is sufficient to fund the company into the first quarter of fiscal year 2024.
However, Redx said it continues to evaluate alternative options to extend its cash runway beyond this period.
Chief executive, Lisa Anson, said: “During the six months to 31 March 2023 the company has prioritised our industry-leading ROCK (Rho-associated protein kinase) portfolio where we have made very significant progress.
“Our lead asset RXC007, a next-generation selective ROCK2 inhibitor, is progressing well through a Phase 2a clinical trial in idiopathic pulmonary fibrosis (IPF), with topline data expected in Q1 2024.
“Our first-in-class GI-targeted ROCK inhibitor, RXC008, is on track for a CTA submission in H2 2023 to become our second ROCK programme in clinical development.
“We also look forward to the important RXC004 Phase 2 combination data due at the end of 2023 and remain well positioned to deliver multiple near-term value inflection points.”
She added: “We remain very enthused by the data to date from our clinical portfolio, and the overall momentum within our pipeline.
“Whilst disappointed that the announced merger with Jounce did not complete, we remain well positioned to deliver multiple near-term value inflection points. Redx retains the foundations for longer term success and shareholder value creation and our board will continue to explore all options to secure the funding required to further enable this.”
Dr Mike Mitchell and Dr Julie Simmonds, analysts with investment bank Panmure Gordon, said: “Interims from Redx Pharma cover an eventful period, notably including the proposed business combination with Jounce Therapeutics announced in February, which was terminated post-period when Jounce agreed to an unsolicited all-cash offer from Concentra Biosciences.
“Meanwhile, Redx has continued to support its wholly-owned development programmes including lead asset RXC007 (fibrosis), RXC004 (oncology) and RXC008 (fibrostenotic Crohn’s disease).
“Period-end cash of £34.6m will support the company into Q1 2024 and we maintain our view of the pipeline in terms of its unique positioning at the intersection oncology and fibrosis.
“Our Buy recommendation is underpinned by our rNPV-derived target price of 155p and we will look to update our investment thesis in due course following today’s results.”
