Redx Pharma plc (LON: REDX) is a clinical-stage R&D company focused on drugs targeting oncology and fibrotic disease. 2018 was a year that reset the benchmarks – new management team, restructured organisation focused on two therapeutic areas, and a clean balance sheet. 2019 will be characterised by a number of major milestones, including the recent restart of the Phase I/IIa trial with RXC004 with a revised protocol, and we note that RXC006 has been nominated as the first development candidate in the anti-fibrotic programme. Meanwhile, operating costs have been reduced while management considers all options available to strengthen its balance sheet.
- Strategy: REDX is focused on the discovery and early clinical development of small molecule therapeutics in oncology and fibrotic disease. Its strategy is to develop assets through proof-of-concept clinical trials and then partner them for late-stage development and commercialisation.
- Interims: REDX took the opportunity provided by its interim results to update the market on the advancement of its pipeline and financial position. The main news is the start of the trial with RXC004 with a revised protocol. REDX has also announced a £2.5m short-term loan. Net cash at 31 March was £3.3m.
- Trial re-started: The Phase I trial with a reformulation of the porcupine inhibitor RXC004 has been resumed using a revised protocol, and REDX has indicated that the first patient has initiated, and additional patients are planned for enrolment. Initial safety and tolerability results are anticipated in 2H’19.
- Risks: REDX has emerged from fiscal 2018 in a clean position with a focused strategy. The company has limited cash resources, boosted by a short-term shareholder loan, while it continues to explore the long-term funding of the group to advance the proof-of-concept trials for its development programmes.
- Investment summary: The business plan focuses cash resources on progressing its drug leads in oncology and fibrotic disease to proof-of-concept early clinical development. Big pharma has been shown to pay substantial prices for good science and novel and/or de-risked assets with clinical data, reinforcing REDX’s strategy, potentially generating good returns and enhancing shareholder value.
