Brokers back pharma company’s ‘game changing’ new treatment trials

Redx Pharma

Brokers have today reiterated their ‘Buy’ call on Macclesfield-based drugs discovery company, Redx Pharma, after it announced tests have started on its proposed ‘game changing’ treatment for fibrostenotic Chron’s disease.

They also increased their share target price on the back of the announcement by the Cheshire biotech company, which is also focused on cancer treatments.

Redx revealed today that the first participant has been dosed in a Phase 1 clinical trial for its RXC008 treatment.

It is expected that results from the healthy volunteer cohorts will be available by the end of 2024.

Dr Mike Mitchell and Dr Julie Simmonds, analysts at investment bank Panmure Gordon, said the condition is an area which they continue to regard as “materially underserved” and where there is significant unmet clinical need.

They said: “While anti-inflammatory strategies are used for Crohn’s disease, scant progress has been made on background fibrosis or fibrostenotic Crohn’s disease without surgically invasive treatments.

“Accordingly, we regard RXC008 as a potentially game-changing opportunity in this disease space. We reiterate our Buy recommendation which is underpinned by our upgraded 130p (previously 125p) rNPV-derived target price.”

They added: “We consider today’s news represents an important advance for Redx’s clinical development portfolio and demonstrates continued value-creation potential. RXC008 is the sixth asset from Redx to enter clinical development, reinforcing the company’s track-record in small molecule drug discovery and strengths in medicinal chemistry and translational science.

“Meanwhile, we remind investors of the company’s wider ability to create value through strategic partnerships, exemplified by the recent acquisition by Jazz Pharmaceuticals of Redx’s KRAS inhibitor programme – which includes G12D selective and pan-KRAS molecules – in a $870m headline deal announced earlier this month.

“In light of today’s news, we update our assumptions relating to the probability of success for RXC008, given that we view the move into the clinic as recognition of potential de-risking for the programme.”

Lisa Anson, CEO of Redx

Redx chief executive, Lisa Anson, said: “RXC008 is a potential first-in-class treatment for patients with fibrostenotic Crohn’s disease, a debilitating condition where successive surgeries are the only treatment option available today.

“This milestone represents the sixth asset from Redx to enter clinical development, continuing our strong track record in small molecule drug discovery as a result of our world class medicinal chemistry and translational science expertise.”

Dr Helen Timmis, Interim Chief Medical Officer at Redx, said: “Fibrostenotic Crohn’s disease patients face a significant unmet clinical need and I am pleased that we have successfully progressed RXC008 into the clinic.

“The strength of our preclinical package makes us hopeful that RXC008 can be a potential first-in-class therapeutic treatment option for fibrostenotic Crohn’s patients, and we look forward to reporting the Phase 1 healthy volunteer data later this year.”

Fibrostenotic Crohn’s disease is a chronic condition that causes inflammation and fibrotic stricture formation in the GI-tract, the organs that food and liquids travel through when they are swallowed, digested, and absorbed.

More than 50% of patients diagnosed with Crohn’s disease will develop fibrostenosis within 10 years of diagnosis. There are currently no drugs specifically approved for the underlying fibrosis, which can progress, despite intervention with anti-inflammatory therapies.

The only current treatment options are invasive surgical procedures to remove the affected part of the GI-tract with the majority of patients requiring many successive surgical interventions.