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Thursday 26 March, 2015

Redx Pharma Ltd

Pricing Details of IPO

RNS Number : 4919I
Redx Pharma Limited
26 March 2015
 



 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

 

This announcement is an advertisement and not a prospectus and does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to in this announcement to any person in any jurisdiction, including the United States, Australia, Canada, the Republic of South Africa, Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. Investors should not purchase or subscribe for any securities referred to in this announcement except on the basis of information in the admission document (the "Admission Document") expected to be published by Redx Pharma Plc (the "Company" or "Redx" or "Group") in due course in connection with the proposed admission of its ordinary shares ("Shares") to trading on AIM, a market operated by London Stock Exchange plc. A copy of the Admission Document will, following publication, be available for viewing on the Company's website at www.redxpharma.com. References in this announcement to "Redx" or the "Group" mean the Company and its subsidiaries.

 

Redx Pharma Plc

("Redx" or the "Company" or "Group")

 

Pricing of Initial Public Offering

 

Placing to raise gross proceeds of £15.0 million

Trading on AIM to commence on 27 March 2015

 

Further to the announcement of its intention to seek an admission to trading on AIM ("Admission"), Redx, the drug discovery and development company, is pleased to announce details of the pricing of its initial public offering (the "IPO") and the placing of 17,647,059 new ordinary shares of 1 pence each in the Company ("Ordinary Shares") ("the Placing") at a price of 85 pence per share (the "Placing Price"). 

 

KEY POINTS

 

·    Redx has placed 17,647,059 New Ordinary Shares at 85p per share to raise £15 million (gross).  Shore Capital is acting as the Group's Nominated Adviser and Broker and acted as sole bookrunner to the Placing.

 

·    At the Placing Price, Redx's market capitalisation will be approximately £55.2 million on Admission.

 

·    Shares in Redx will begin trading on AIM on 27 March 2015 with the ticker REDX.

 

·    Established in 2010, Redx is focused on improving the characteristics of existing drug classes to create highly differentiated 'best-in-class' new drugs principally in cancer and infectious disease.

 

·    Redx has established an extensive pipeline of proprietary drug candidates, targeting best-in-class performance, which are patent protected:

-       four programmes have achieved pre-clinical proof of concept, with relevance for respective therapies to treat MRSA, bone tumours, skin, brain and blood cancers, where Redx has demonstrated superior performance to competitor drugs.

 

·   Redx's work to date has been endorsed by partnerships with global pharmaceutical companies and the NHS, including a two year research collaboration and option agreement with AstraZeneca UK Limited, focusing on an undisclosed oncology drug candidate, signed in August 2014.

 

·    Redx's business model aims to capitalise on the growing need of established large pharmaceutical companies to replenish their drug development pipelines as well as enabling emerging pharmaceutical companies to diversify their existing pipelines.

 

·    As Redx continues to grow, the Directors believe that the Group should have the opportunity to develop additional valuable pipeline assets in current and new therapeutic areas.

 

·    The net proceeds of the Placing will be used to progress the Group's current pipeline of oncology and infectious disease assets and support the launch of a third subsidiary focused on immunology.

 

Full details of the Admission and Placing will be included in the Admission Document, which is expected to be published and available on the Company's website on 27 March 2015.

 

Neil Murray, Chief Executive Officer of Redx, commented:

 

"This placing and Redx's admission to AIM mark another step in the Company's development and the prospects for Redx look exciting.  We have a very promising pipeline of potential drug candidates, in two areas of high need, cancer and infection.  Alongside this we have strong partnerships and collaborations - including with AstraZeneca and the NHS.  Our approach - to focus on improving existing drugs and to partner early - has helped us to establish Redx as a highly attractive pipeline generator to large pharma and emerging life science companies.  We look forward to reporting on the Company's continuing progress as an AIM-quoted company."

 

 

For further information, please contact:

 

Redx


T: 0151 706 4747

Neil Murray, Chief Executive

Company website: redxpharma.com






Shore Capital (Nomad and Broker)


T: 020 7408 4090

Bidhi Bhoma / Patrick Castle / Edward Mansfield






KTZ Communications


T: 020 3178 6378

Katie Tzouliadis / Deborah Walter



 

 

 



PLACING STATISTICS

Placing Price

85 pence

No. of Ordinary Shares in issue immediately prior to the Placing

47,334,150

No. of Placing Shares being issued pursuant to the Placing

17,647,059

Enlarged Share Capital

64,981,209

Placing Shares as a percentage of the Enlarged Share Capital

27.2%

Gross proceeds of the Placing

£15.0 million

Market capitalisation of the Company at the Placing Price on Admission

£55.2 million

 

Unless the context otherwise requires, defined terms shall have the meaning ascribed to them in the Admission Document available on the Group's website.

 

INTRODUCTION AND BUSINESS OVERVIEW

 

Established in 2010 and based at two sites, in Liverpool and Alderley Park, Cheshire, Redx is a drug discovery and development company focused on the development of proprietary, small molecule therapeutics to address areas of unmet medical need, principally in cancer and infectious disease. 

 

The Company's approach is to focus on improving the characteristics of existing drug classes to create highly differentiated best-in-class new drugs. Over a short period, Redx has already established a portfolio of 13 proprietary, (patent-protected) drug programmes.  Four programmes have achieved pre-clinical proof of concept, with relevance for respective therapies to treat MRSA, bone tumours, skin, brain and blood cancers.  

 

Redx's oncology-related drug programmes encompass immuno-oncology, a relatively new area of medicine which focuses on the development and delivery of therapies that improve the body's intrinsic potential for generating an effective immune response against cancer. This is an area of high interest to pharmaceutical companies. 

 

The directors of the Company believe that Redx's current pipeline of anti-infective drug programmes has the potential to produce one of the first new chemical classes of antibiotics in a generation, which, if achieved, would be a landmark in the global fight against anti-microbial resistance. In addition, Redx is working on a number of antiviral targets including Hepatitis B and influenza.

 

In addition to oncology and infection, Redx has the opportunity to launch into a third therapeutic area, immunology, and has secured an offer of a Regional Growth Fund grant of £4.2 million to support this. The Company expects to commence operations in this new area during 2015.

 

COMMERCIAL PARTNERSHIPS, INCLUDING WITH ASTRAZENECA AND THE NHS

 

As part of its business model, Redx seeks partnering and licensing deals at an early stage in its drug development programmes with large and emerging mid-size pharmaceutical companies. These partnerships have the potential to deliver development and sales milestone income to Redx as well as royalties on future sales.

 

To date, Redx has secured five commercial partnerships and collaborations, the most significant being a two-year research collaboration and option agreement, signed in August 2014, with AstraZeneca UK Limited. The research collaboration is targeting the genetic drivers of tumour growth and is focused on an undisclosed oncology drug candidate.

 

The Company has also signed an innovative partnership with the NHS, working with The Royal Liverpool and Broadgreen University Hospital Trust on new drugs to tackle drug-resistant bacteria, including MRSA.

 

Its other commercial deals and collaborations are with:

 

·      Institut de Recherche Pierre Fabre, the French pharmaceutical group, for skin cancer;

·      The European Innovative Medicines Initiative (IMI) for an ENABLE project (a pharma consortium led by GlaxoSmithKline) on gram-negative microbial infection; and

·      The National Institute of Allergy and Infectious Diseases (NIAID) for influenza-related drug programmes. 

 

THE GROUP'S GROWTH STRATEGIES

 

The Group's growth strategies are as follows:

 

 

the Group is focused on securing further commercial deals for its existing programmes;

the Group intends to target commercial deals which involve a combination of R&D revenues, upfront licencing fees, development milestones and royalties on commercial sales, over the 15 to 20 year lifetime of a programme's patents. Since Redx's involvement in programmes will typically terminate at candidate stage, the Group should be free to reallocate resource to new targets whilst still accruing revenues from those programmes where deals have been secured;

 

 

Redx has secured an offer of a further RGF grant for £4.2 million to support the establishment of a third therapeutic area focused on immunology. The Directors believe that this will allow the Group to broaden its capability and secure further deal flow; and

 

 

as Redx continues to grow, the Directors believe that the Group should have the opportunity to develop additional valuable pipeline assets in current and new therapeutic areas.

 

KEY STRENGTHS OF THE GROUP

 

The Directors believe the Group has the following competitive advantages over other companies:

 

 

Focus of proprietary portfolio - due to Redx's focus on critical areas of interest to pharmaceutical companies in high value therapeutic areas, the Directors believe that the Company is well positioned to meet industry demand for new pipeline programmes;

 

 

Strength and breadth of proprietary portfolio - the range of the Company's portfolio combines both significant potential upside on commercialisation of programmes with mitigation of investment risk through the breadth of the portfolio;

 

 

Track record of innovation - Redx has a proven chemistry and biology expertise which has resulted in a pipeline of assets with demonstrated pre-clinical proof of concept that has been generated more quickly and cost-effectively than traditional drug discovery;

 

 

Business model offers an attractive risk/reward profile - the Company's model of early stage partnering with larger and emerging well-funded pharmaceutical companies lowers the typical risk profile of smaller pharmaceutical companies;

 

Commercial validation of business model - Redx has entered into five commercial deals and collaborations in the last 18 months, including signing of an agreement with AstraZeneca UK Limited which the Company believes represents validation of its business model;

 

 

Broad IPR estate - the Company has a wide ranging estate of intellectual property rights within the specific pharmaceutical areas it is targeting, which the Company believes provides it with both a significant protection of its competitive position and demonstrates significant credibility to its potential partners in larger and emerging pharmaceutical companies; and

 

 

Range and experience of staff - the Company currently employs approximately 120 scientists with a diverse mix of capability and experience, providing the organisation with a core intellectual capability which the Company believes is well beyond that available to many other pharmaceutical companies.

 

 

REASONS FOR ADMISSION AND USE OF PROCEEDS

 

The Directors believe Admission will assist the Company in its development by:

 

providing access to development capital to progress the current and future pipeline and expanding within therapy areas;

 

 

allowing the Company to progress programmes further to secure superior returns for investors;

 

exploiting new therapeutic opportunities to increase deal flow;

 

 

strengthening the Company's balance sheet to have a stronger position in forthcoming licensing negotiations;

 

increasing the credibility and visibility of Redx to the global pharmaceutical industry; and

 

 

providing the Company with the ability to incentivise its employees through the Share Option Scheme, which should assist the Company in continuing to attract, retain and motivate high calibre employees.

 

The net proceeds of the Placing, which are expected to amount to approximately £13.5 million, will be

used by the Company to:

 

 

progress the Company's current pipeline of oncology and infectious disease assets to stages which will support licence and collaboration deals; and

 

 

support the launch of a third subsidiary focused on immunology, additionally supported by the Company securing an offer of a £4.2 million RGF grant in 2014, which the Company expects will lead to the generation of additional pipeline assets to support future deal flow.

 

DETAILS OF THE PLACING

 

The Placing comprises the placing by Shore Capital, as agent for the Company, of 17,647,059Placing Shares with institutional and other investors. The Placing will raise approximately £13.5 million net of expenses for the Company. The Placing Shares will represent approximately 27.2 per cent. of the Enlarged Share Capital. The Placing is not being underwritten.

 

CURRENT TRADING

 

The Group is currently trading in line with management's expectations. In December 2014, the Group achieved its fourth pre-clinical proof of concept to date with its BTK inhibitor programme. In February 2015, the Company nominated a development candidate for its SMO programme in skin cancer. The Company's cash balance as at 31 December 2014 was £1.9 million.

 

BOARD OF DIRECTORS

 

Redx's Board comprises three Executive Directors and four Non-executive Directors, as set out below:

 

Dr. Frank Murdoch Armstrong, aged 57, Non-executive Chairman

Dr Armstrong joined the board of Redx in September 2014. He is an experienced, medically qualified pharmaceutical executive having served as a non-executive director or chairman for a number of private and public life science companies in the UK, Switzerland and the USA.  Frank previously held senior positions in R&D at Merck Serono, Bayer and Zeneca.

 

Dr. Neil David Murray, aged 51, Chief Executive Officer

Dr Murray co-founded the Company in 2010 and has over 25 years' experience in the pharmaceutical industry, holding senior operational, commercial and R&D positions with Solutia, Vernalis (formerly Vanguard Medica), Sigma-Aldrich and Glaxo-Wellcome.

 

Phillip Tottey, aged 53, Chief Financial Officer

Mr Tottey joined Redx in 2013.  He is a qualified accountant with significant financial and operational expertise developed during a career spanning 34 years.  Having started his career at Grant Thornton, Phil's background encompasses industries including media, construction and retail.

 

Dr. Derek Lindsay, aged 53, Chief Operating Officer

Dr Lindsay is a co-founder of the business. Previously he was a Director of Innovation of pharmaceutical industry consortium Britest Ltd, and was formerly R&D Director of Avecia Pharmaceutical Products. Dr Lindsay has over 20 years' experience in senior R&D positions in ICI and Zeneca.

 

Dr. Peter Jackson, aged 51, Non-executive Director

Dr Jackson co-founded the business in 2010 and has 25 years' experience in the sector. He was formerly head of Avecia's Pharmaceutical Products business unit, with previous senior commercial and R&D positions at ICI and Zeneca. Dr Jackson has non-executive directorships with ADC Biotechnology and Yorkshire Process Technology

 

Norman Molyneux, aged 59, Non-executive Director

Mr Molyneux co-founded the Company and is a qualified accountant, formerly with PriceWaterhouseCoopers. Mr Molyneux also runs Acceleris, a corporate finance firm specialising in EIS led investment transactions, and has extensive experience working with growth companies

 

Peter McPartland, aged 61, Non-executive Director

Mr McPartland is managing director of Reacta Biotech Limited, a Manchester based start-up.  A graduate pharmacologist, he worked as an investment analyst before joining Schroder Ventures, and then becoming a co-founder and general partner of SV Life Sciences.  He has been a director of a number of leading companies in the field, including Shire Pharmaceuticals, Chiroscience and Triangle Pharmaceuticals.

 

 

Disclaimers

This announcement has been prepared by and is the sole responsibility of Redx and has been approved by Shore Capital and Corporate Limited solely for its purposes of section 21(2) (b) of the Financial Services and Markets Act 2000.

In any EEA Member State that has implemented Directive 2003/71/EC (together with any implementing measures in any Member State ("the Prospectus Directive") other than the United Kingdom) this announcement is only addressed to and directed at persons in such member states who are qualified investors within the meaning of Article 2(1) (e) of the Prospectus Directive ("Qualified Investors"). Any investment or investment activity to which this announcement relates is available only to Qualified Investors in any member state of the EEA, and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

 

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

 

This announcement may contain "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, targets, proposed acquisitions and objectives are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from results and performance expressed in, or implied by, these statements. These factors include but are not limited to those described in the Admission Document to be issued by the Company in due course.

 

The information given in this document and the forward-looking statements speak only as at the date of this announcement. Each of the Company, Shore Capital & Corporate Limited, Shore Capital Stockbrokers Limited and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the AIM Rules for Companies or other applicable laws, regulations or rules.

 

The IPO timetable, including the publication of the Admission Document and/or the date of Admission, may be influenced by a range of circumstances, including market conditions. There is no guarantee that the Admission Document will be published or that Admission will occur and you should not base your financial decisions on the Company's intentions in relation to the Placing and Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Placing. The value of the Company's ordinary shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the Placing for the person concerned. Past performance cannot be relied upon as a guide to future performance.

 

 

The Shares have not, nor will they be, registered under the US Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States or under the applicable securities laws of Australia, Canada, the Republic of South Africa or Japan. Subject to certain exceptions, the Shares may not be offered or sold in the United States, Australia, Canada, the Republic of South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, the Republic of South Africa or Japan. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

Shore Capital & Corporate, which is authorised and regulated in the United Kingdom by the FCA, is acting as Nominated Adviser to the Company in connection with the Placing and Admission and is advising no one else in relation to the Placing and Admission and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for advising any other person in relation to the Placing or Admission or otherwise. The responsibilities of Shore Capital & Corporate, as Nominated Adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange and are not owed to the Company or any director of the Company or to any other person in respect of their decision to acquire Shares in reliance on any part of this document. No representation or warranty, express or implied, is made by Shore Capital & Corporate as to the contents of this announcement, or for the omission of any material from this announcement. Save as set out above Shore Capital & Corporate has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Shore Capital & Corporate for the accuracy of any information or opinions contained in this document or for the omission of any information from this announcement.

 

Shore Capital Stockbrokers, which is authorised and regulated in the United Kingdom by the FCA, is acting as Broker to the Company in connection with the Placing and is advising no one else in relation to the Placing and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for advising any other person in relation to the Placing or otherwise. No representation or warranty, express or implied, is made by Shore Capital Stockbrokers as to the contents of this announcement, or for the omission of any material from this announcement. Shore Capital Stockbrokers has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Shore Capital Stockbrokers for the accuracy of any information or opinions contained in this announcement or for the omission of any information from this announcement.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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