TIDMREDX
RNS Number : 5002M
Redx Pharma plc
31 July 2017
31 July 2017
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE MARKET ABUSE REGULATION. UPON THE PUBLICATION OF THE
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION
IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
REDX PHARMA PLC (in administration)
("Redx" or "the Company")
Disposal of BTK inhibitor drug development program
Redx, the drug discovery and development company, announces that
Jason Baker and Miles Needham of FRP Advisory LLP, joint
administrators of the Company and of its subsidiary, Redx Oncology
Limited, has entered into an unconditional agreement (on behalf of
the Companies) on Friday 28 July 2017 for the disposal to Loxo
Oncology, Inc., the US-based NASDAQ-quoted biopharmaceutical
company, of certain patents, intellectual property, contracts for
product manufacture, and physical materials relating to Redx's BTK
inhibitor drug development program for the sum of US$40
million.
Further details of the Disposal are set out in the Appendix to
this announcement.
Jason Baker, joint administrator of the Company, commented:
"We are pleased to have taken a significant step forwards in
line with our strategy towards the rescue of the Companies as going
concerns. Today's unconditional agreement is for the realisation of
certain of the Group's intellectual property assets, the proceeds
from which will allow for the creditors of the Companies to be paid
in full and provide working capital for the Group's continuing
business, thus restoring the Companies to solvency. 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."
For further information, please contact:
Redx Pharma Plc (in administration)
Contact for the Joint Administrators:
James Rossiter (Morgan Rossiter) T: + 44 203
195 3240
Cantor Fitzgerald Europe (Nomad &
Broker)
Phil Davies/ Michael Reynolds T: +44 20
7894 7000
WG Partners LLP (Joint Broker)
Claes Spång/ Chris Lee/ David T: +44 20
Wilson 3705 9330
About Redx Pharma Plc (in administration)
Company website: redxpharma.com
Notes:
Jason Baker and Miles Needham have been appointed as joint
administrators of Redx Pharma plc (in administration). The
company's affairs, business and property are being managed by the
joint administrators.
Redx is focused on the discovery and development of proprietary,
small molecule therapeutics to address areas of high, unmet medical
need, principally in cancer and fibrosis, providing a pipeline of
assets to larger and emerging companies. By improving the
characteristics of existing drug classes to create highly
differentiated, novel, best-in-class/first-in-class drugs, Redx has
already established a broad portfolio of proprietary drug
programs.
APPIX
Background to and reasons for the Disposal
The Company was incorporated in 2010 and admitted to trading on
AIM in March 2015. It is the parent company of three subsidiaries,
including Oncology, and holds all intellectual property relating to
the Group's pharmaceutical discoveries. The research activities of
the Group are undertaken by the subsidiaries, funded by the
Company.
The Group is focused on the discovery and development of
proprietary, small molecule therapeutics to address areas of
high-unmet medical need, in cancer and fibrosis. By improving the
characteristics of existing drug classes, the Group aims to create
differentiated, novel drugs. The Group has an established portfolio
of proprietary drug programs that it is developing alone and in
partnership with leading pharmaceutical companies and healthcare
bodies. Redx Pharma's leading asset, RXC004 (porcupine inhibitor),
is about to enter Phase I clinical development for gastric, biliary
and pancreatic cancers, and for combination with checkpoint
inhibitors. RXC005 (reversible BTK inhibitor) is focused on
treating patients with chronic lymphocytic leukaemia who have
become resistant to ibrutinib, and will be entering studies in the
coming months to enable submission of an Investigational New Drug
(IND) application in 2018.
Oncology owes LCC approximately GBP3.5m pursuant to a loan
entered into in 2012 (which consists of the initial facility amount
of GBP2m together with interest accrued amounting to GBP1.5m). The
loan is secured via a debenture dated 1 June 2012 and is
cross-guaranteed by the Company and secured via a fixed and
floating charge over its assets.
The LCC loan was initially due for repayment after two years,
but the term was subsequently extended in 2014 for a further year
and in 2015 for a further two years resulting in the loan becoming
due on 31 March 2017. On 24 May 2017, LCC appointed Jason Daniel
Baker and Miles Andrew Needham as Joint Administrators to the
Companies. Upon the appointment of the Joint Administrators in
respect of the Company, the Company requested the suspension of the
trading of its shares in accordance with the AIM Rules.
The Joint Administrators' actions
On their appointment the Joint Administrators determined that it
would likely be possible to rescue the Companies as going concerns
and that two primary strategies would be run concurrently in order
to achieve this objective:
-- to explore the feasibility of raising additional funding from
existing shareholders in order to repay all creditors and rescue
the Companies as going concerns;
-- to realise certain of the Group's intellectual property
assets, the expected proceeds from which would likely be sufficient
to rescue the Companies as going concerns.
Having considered the options of raising funds or a sale of
intellectual property assets, the Joint Administrators (after
discussing with the Company's leading / major shareholders)
believed the sale of the assets to Loxo Oncology, Inc. would lead
to the best outcome for creditors and the Company's other
stakeholders alike.
Summary of the terms of the Disposal and the Sale Agreement
In the Sale Agreement the Companies have assigned to Loxo
Oncology, Inc. whatever rights, title and interest they have in and
to the Assigned Rights, and have novated to Loxo Oncology, Inc. the
Related Agreements, for US40 million paid in a single upfront cash
payment on the signing of the Sale Agreement. No further royalties,
licence fees, milestones or other payments are due to the Companies
under the Sale Agreement. No representations or warranties have
been given to Loxo Oncology, Inc. in respect of the Assigned Rights
or the Related Agreements. Redx is subject to non-competition
provisions for three years following the sale.
Information on the Assigned Rights
BTK is a key biological enzyme target which has been validated
by the approval of the drug ibrutinib (Imbruvica(TM)) in the
treatment of a range of blood cancers, such as chronic lymphocytic
leukaemia. The Assigned Rights represent all the Companies' rights
to the BTK discovery program, including RXC005, a reversible BTK
inhibitor which has shown potent inhibitory activity towards
wild-type (normal) BTK as well as mutant BTK (C481S), the latter of
which is refractory to ibrutinib inhibition.
The continuing business of the Group
The proceeds of the Disposal will be used to repay in full all
the creditors of the Companies and to provide working capital for
the Group's continuing business.
Following the Disposal the Group retains the remainder of its
portfolio of proprietary drug programs of which the principal is
RXC004, an oral, small molecule Porcupine inhibitor in development
both as a monotherapy and in combination with checkpoint inhibitors
for difficult to treat cancers. Given that the Assigned Rights
comprise only part of the Company's broad drug development
activities, the Company is expected to continue the same general
business as previously.
On 23 June 2017 the Company announced that it had received
approval from the UK Medicines and Healthcare Products Regulatory
Agency (MHRA) and the Ethics Review Committee for its Clinical
Trial Application (CTA) for RXC004. The approval provides
permission for Redx to initiate a Phase I study of RXC004 in
patients.
Next steps for the Administration processes
Pursuant to the Sale Agreement, the Joint Administrators have
agreed that they shall remain in office for a period to oversee the
fulfilment of certain of the Companies' obligations to Loxo, with a
longstop date of 12 weeks from the date of the Sale Agreement. In
addition, the Joint Administrators are awaiting a finalised
business plan from management, in order to satisfy themselves that
the Companies are rescued as going concerns. Once that has been
reviewed (and on the assumption a viable plan is presented) it will
be the Joint Administrators' view that the objectives of the
administrations have been achieved and, subject to the relevant
terms of the Sale Agreement referred to above, they will file the
relevant forms at the Companies Court and on Companies House. Once
this step has occurred, the Companies will exit administration and
return to the control of the management.
It is the understanding of the Joint Administrators that, once
the administrations have ended, the directors of the Company will
request the lifting of the suspension of the Company's shares from
trading on AIM.
In the interim, all creditors and members will receive a more
detailed statutory report detailing the Joint Administrators
proposals shortly.
Definitions
In this announcement the following terms shall, where the
context so requires, have the following meanings:
AIM the AIM Market operated by the
London Stock Exchange;
AIM Rules the AIM Rules for Companies of
the London Stock Exchange from
time to time;
Assigned Rights means such of the following rights,
as are held by the Companies:
* the Patents; and
* intellectual property rights in the Data Package;
BTK Bruton's tyrosine Kinase (Uniprot
Companies # Q06187);
Redx and Oncology;
Data Package means documents, product samples
and other materials identified
as categories 1 to 4 in Schedule
3 of the Sale Agreement, where
"documents " as used in this definition
shall include all documents identified
as follows, if they exist (as noted
in Schedule 2 of the Sale Agreement),
and in each case solely to the
extent they relate to the BTK Program
(if documents include content which
is not created in relation to the
BTK Program, then the latter shall
be redacted before they are made
available to LOXO):
* the results of all trials or tests undertaken by or
on behalf of REDX and analyses of those results;
* pre-clinical test reports and all clinical or other
test or trial results;
* laboratory notebooks;
* regulatory documents;
* documentation related to the Patents;
Disposal the disposal of the Assigned Rights
and the Related Agreements to Loxo
Oncology, Inc. on and subject to
the terms of the Sale Agreement;
Group Redx and its subsidiaries;
Joint Administrators Jason Baker and Miles Needham,
both of FRP Advisory LLP;
LCC Liverpool City Council;
London Stock London Stock Exchange plc;
Exchange
Loxo Loxo Oncology, Inc.;
Oncology Redx Oncology Limited, a subsidiary
of the Company;
Patents any and all of the patents and
patent applications (including
applications in draft form, if
any, and any and all rights to
file patent applications existing
as of the Effective Date of the
Sale Agreement) relating to the
REDX BTK Program, including those
referred to in Schedule 2 of the
Sale Agreement, including any PCT
applications (including national
phases thereof), divisionals, continuations,
continuations in part, patents
issuing therefrom, including extensions
(such as patent term extensions),
reissues, re-examinations, and
any supplementary protection certificates
allowed on the foregoing;
REDX BTK Program means REDX's research program for
the development of small molecules
each of which has an intended primary
mode of action as a BTK inhibitor,
including the drug candidate known
as "RXC005";
Related Agreements the contracts for product manufacture
and other issues relating to RXC005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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