Cheshire Biotech firm’s £14m share issue approved

A £14m funding raise through the issue of new shares by Cheshire biotech company Redx Pharma has been approved.

Last month the company, based on Alderley Park, announced the issue of 54,074,458 Subscription Shares to existing shareholders to fund its development plans for 2024.

Redx’s chair, Dr Jane Griffiths, said at the time: “At Redx we are focused 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.”

The subscription was conditional, amongst other things, on the passing of certain resolutions at a general meeting which was held this morning (November 6), where all the resolutions proposed were duly passed by the requisite majority.

Redx said the Subscription Shares are expected to be admitted to trading on AIM at 8:00 a.m. on November 7, 2023.

One of the Redmile Funds, which taken together are the company’s largest shareholder, has invested more than £8m to acquire nearly 60% of the new shares.

Sofinnova Partners has invested £2m, while other shareholders Polar Capital and Invus have also joined the fundraising round.

The Cheshire biotech company has had a challenging year, after the planned merger with Jounce Therapeutics collapsed in March when the American drug research business took up another offer instead.

Redx said it will have £28.1m in cash for working capital to “fund the anticipated progression of its ROCK portfolio to important value inflection points in 2024”.

In mid-day trading today (November 6) Redx shares were priced at around 25.30p per share, compared with the opening price of 25.96p. The 52-week high has been 70p per share, while the low is 22p.