REDX Pharma (LON:REDX) new management team is continuing to focus its financial resources on progressing lead candidates in oncology and fibrotic disease into the clinic. An extensive internal review, led by the new CEO Lisa Anson has reinforced the vision of a streamlined pipeline in these two disease areas, with the aim of progressing drug candidates to deliver clinical proof-of-concept. 2019 is expected to be a busy year for REDX, with several major milestones due. Meanwhile, REDX has disclosed, for the first time, the profiles of its ROCK2 inhibitors in in vitro and an in vivo kidney damage model, showing potential best-in-class results.
Strategy: REDX is focused on the discovery and early clinical development of small molecule therapeutics in oncology and fibrotic disease. It is also focused on taking assets through proof-of-concept clinical trials and then partnering them for late-stage development and commercialisation.
Poster presentation: REDX’s poster at the American Society of Nephrology in San Diego, presents, for the first time, the profile of its ROCK2 inhibitors. In vitro and in vivo data show selective modulation of markers of fibrosis pathways through ROCK2 inhibition, with no cardiovascular safety concerns.
ROCK2 programme: REDX is primarily investigating the effect of ROCK2 inhibition in fibrotic diseases (including IPF), with CKD an area of secondary interest. The ROCK2 programme is expected to enter preclinical development in 2H’19 in non-alcoholic steatohepatitis (NASH), and then the clinic in 2H’20.
Risks: After a difficult period, REDX has emerged in much better shape. While all early-stage pharma/biotech companies carry substantial risks and are capital- intensive, the rewards can be substantial, as evidenced by the successful disposal of the company’s BTK programme for $40m in cash in 2017.
Investment summary: The strengthened management team is moving forward with a revised business plan that 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 handsome prices for novel and/or de-risked assets with clinical data, reinforcing REDX’s strategy. This can generate good returns and shareholder value for companies such as REDX Pharma.
