REG - Redx Pharma plc - Interim Results for the Six Months Ended 31 March
17/05/2023 07:17
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RNS Number : 6485Z Redx Pharma plc 17 May 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
REDX PHARMA PLC
("Redx" or the "Company")
Interim Results for the Six Months Ended 31 March 2023
Focus on progressing industry-leading ROCK portfolio with RXC007 Phase 2a
trial on track to deliver topline data Q1 2024 and RXC008 CTA submission
expected H2 2023
RXC004 combination modules open for enrolment with topline data expected H2
2023
Redx funded through significant value inflection points; evaluating all
options to extend cash runway beyond Q1 2024
Alderley Park, UK, 17 May 2023 Redx (AIM:REDX), the clinical-stage
biotechnology company focused on discovering and developing novel, small
molecule, targeted therapeutics for the treatment of fibrotic disease and
cancer announces its unaudited financial results for the six month period
ended 31 March 2023.
Lisa Anson, Chief Executive Officer, Redx Pharma commented: "During the six
months to 31 March 2023 the Company has prioritised our industry-leading ROCK
portfolio where we have made very significant progress. Our lead asset RXC007,
a next-generation selective ROCK2 inhibitor, is progressing well through a
Phase 2a clinical trial in idiopathic pulmonary fibrosis (IPF), with topline
data expected in Q1 2024. Our first-in-class GI-targeted ROCK inhibitor,
RXC008, is on track for a CTA submission in H2 2023 to become our second ROCK
programme in clinical development. We also look forward to the important
RXC004 Phase 2 combination data due at the end of 2023 and remain well
positioned to deliver multiple near-term value inflection points."
Operational Highlights:
Advanced RXC007, a next-generation selective ROCK2 inhibitor, with the
commencement of the Phase 2a dose escalation study in IPF:
· On 11 October 2022, the first patient was dosed in Phase 2a IPF
study. The study has been approved in 6 European countries with 14 sites open
and patient recruitment is progressing well and on track to deliver topline
data Q1 2024;
· Recruitment into the translational science sub-study opened in
the UK and under an IND in US, with additional nonclinical work ongoing to
support longer dosing durations in the US;
· On 2 October and 10 November 2022, encouraging preclinical data
were presented at ICLAF and AFDD respectively, supporting expansion into
additional interstitial lung diseases;
· Post period, an initial safety review in the first eight patients
dosed at 20mg BID confirmed no safety signals to date, supporting the planned
dose escalation;
· Post period, on 10 May 2023, preclinical data highlighting
potential in cancer-associated-fibrosis were presented at the Resistant Tumour
Microenvironment, Keystone Symposia.
Progressed RXC008, a GI-targeted ROCK inhibitor being developed as a potential
first-in-class treatment for fibrostenotic Crohn's disease, through
IND-enabling studies with a CTA submission planned in 2023:
· On 23 November 2022, preclinical data were presented at the IBD
Nordic Conference showing RXC008 can suppress fibrosis in animal models of GI
fibrosis.
Commenced patient recruitment into the combination programme for RXC004, a
small molecule Porcupine inhibitor being developed for the treatment of
Wnt-ligand dependent cancers, which is investigating the primary efficacy
hypothesis to overcome immune evasion in combination with anti-PD-1:
· On 10 November 2022, Phase 1 combination data presented at the
Society for Immunotherapy of Cancer Conference (SITC) showed an acceptable
tolerability and PK profile in this patient population supporting a dose of
1.5mg in combination with an anti-PD-1 in the Phase 2 trial. The Phase 2
modules of RXC004 in combination with anti-PD-1 in both PORCUPINE and
PORCUPINE2 continue to recruit, with data expected to report at the end of
2023;
· On 16 December 2022, a clinical trial collaboration and supply
agreement was announced with MSD (Merck & Co., Inc.) for the supply of
Keytruda® 1 (pembrolizumab) for the PORCUPINE2 biliary tract cancer
combination module;
· On 8 March 2023, initial Phase 2 data were reported from the
monotherapy biliary tract cancer (BTC) module, with some patients experiencing
durable clinical benefit. The overall safety and efficacy profile was in
line with the Phase 1 study;
· All monotherapy modules have now been closed for further
recruitment enabling the single agent profile of RXC004 to be characterised
for future partnership and regulatory discussions, whilst streamlining the
study design to prioritise resources and patients to combination arms.
Financial Highlights:
· Cash balance at 31 March 2023 of £34.6 million (31 March 2022:
£31.6 million), sufficient to fund the Company into Q1 2024. The Company is
financed to deliver key project milestones including RXC007 Phase 2a data,
RXC008 CTA submission and RXC004 combination data readout;
· R&D expenses for the period of £16.1 million (31 March 2022
£12.9 million);
· Loss for the period of £20.8 million (31 March 2022 £9.8
million), driven by lower revenue, higher R&D expense and reverse merger
transaction expenses;
· Post period on 3 April, a recommended all-share business
combination with Jounce Therapeutics, Inc. ("Jounce"), announced on 23
February, was terminated following the withdrawal by the board of directors of
Jounce of its recommendation for the combination, in favour of an unsolicited
all-cash offer from another party, which the board of directors of Jounce felt
to be in the best interest of Jounce's shareholders;
· The Company continues to evaluate alternative options to extend
cash runway beyond Q1 2024.
As previously announced, the Company will hold a live webcast of the 2023
interim results presentation at 12pm GMT (7am EST) today. Attendees can
register via the following link:
https://webcast.openbriefing.com/redxpharma-may23/
(https://webcast.openbriefing.com/redxpharma-may23/) and the presentation will
be available for replay on the Company's website at:
https://www.redxpharma.com/investor-centre/presentations-analyst-reports-documents-and-videos/
(https://www.redxpharma.com/investor-centre/presentations-analyst-reports-documents-and-videos/)
.
The person responsible for the release of this announcement on behalf of the
Company is Claire Solk, Company Secretary.
For further information, please contact:
Redx Pharma Plc T: +44 (0)162 546 9918
UK Headquarters
Caitlin Pearson, Head of Communications
ir@redxpharma.com (mailto:ir@redxpharma.com)
Lisa Anson, Chief Executive Officer
US Office
Peter Collum, Chief Financial Officer
SPARK Advisory Partners (Nominated Adviser) T: +44 (0)203 368 3550
Matt Davis/ Adam Dawes
WG Partners LLP (Joint Broker) T: +44 (0)203 705 9330
Claes Spång/ Satheesh Nadarajah/ David Wilson
Panmure Gordon (UK) Limited (Joint Broker) T: +44 (0)207 886 2500
Rupert Dearden/ Freddy Crossley/ Emma Earl
FTI Consulting T: +44 (0)203 727 1000
Simon Conway/ Ciara Martin
About Redx Pharma Plc
Redx Pharma (AIM: REDX) is a clinical-stage biotechnology company focused on
the discovery and development of novel, small molecule, targeted therapeutics
for the treatment of fibrotic disease, cancer and the emerging area of
cancer-associated fibrosis, aiming initially to progress them to clinical
proof of concept before evaluating options for further development and
potential value creation. The Company's lead fibrosis product candidate, the
selective ROCK2 inhibitor RXC007, is in development for interstitial lung
disease and commenced a Phase 2a trial for idiopathic pulmonary fibrosis (IPF)
in October 2022, with topline data expected in Q1 2024. Redx's lead oncology
product candidate, the Porcupine inhibitor RXC004, being developed as a
targeted treatment for Wnt-ligand dependent cancers, is expected to report
combination with anti-PD-1 Phase 2 data during 2023. Redx's third drug
candidate, RXC008, a GI-targeted ROCK inhibitor for the treatment of
fibrostenotic Crohn's disease, is progressing towards a CTA application at the
end of 2023.
The Company has a strong track record of discovering new drug candidates
through its core strengths in medicinal chemistry and translational science,
enabling the Company to discover and develop differentiated therapeutics
against biologically or clinically validated targets. The Company's
accomplishments are evidenced not only by its two wholly-owned clinical-stage
product candidates and rapidly expanding pipeline, but also by its strategic
transactions, including the sale of pirtobrutinib (RXC005, LOXO-305), a
non-covalent (reversible) BTK inhibitor now approved by the US FDA for adult
patients with mantle cell lymphoma previously treated with a covalent BTK
inhibitor, and AZD5055/RXC006, a Porcupine inhibitor targeting fibrotic
diseases including IPF, which AstraZeneca is progressing in a Phase 1 clinical
study. In addition, Redx has forged collaborations with Jazz Pharmaceuticals,
which includes JZP815, a pan-RAF inhibitor developed by Redx which Jazz is now
progressing through Phase 1 clinical studies, and an early stage oncology
research collaboration.
To subscribe to Email Alerts from Redx, please visit:
www.redxpharma.com/investor-centre/email-alerts/
(http://www.redxpharma.com/investor-centre/email-alerts/) .
Chief Executive's Statement
During the six months ended 31 March 2023, we have continued to execute our
core strategy to develop potential best-in-class or first-in-class
therapeutics in areas of high unmet medical need.
We have prioritised the development of our industry-leading ROCK portfolio and
are particularly excited by the potential of the lead programme, RXC007, a
next-generation selective ROCK2 inhibitor which is progressing through a Phase
2a clinical trial in IPF. The ROCK portfolio also includes a potential
first-in-class programme, RXC008, a GI-targeted ROCK1/2 inhibitor which is
advancing towards the clinic as a potential treatment for fibrostenotic
Crohn's disease. RXC004, the Company's lead oncology asset, continues to
recruit patients to the combination modules of the Phase 2 programme and we
expect initial topline data by the end of 2023. Additionally, our discovery
pipeline has continued to advance key research programmes towards our goal of
two further INDs by the end of 2025.
The cash balance at the end of the period of £34.6 million funds our
programmes into Q1 2024 and through multiple near-term value inflection
points. During the period, we have rigorously reviewed our expenses and
portfolio to prioritise resources towards the areas where we see the highest
impact on clinical benefit, commercial returns and value creation for
shareholders.
An industry-leading ROCK portfolio
Redx has developed a unique portfolio of multiple distinct assets targeting
Rho-associated protein kinase (ROCK), a known nodal point for pro-fibrotic
signalling central to fibrosis in a range of fibrotic conditions. Our
medicinal chemistry expertise and deep understanding of the ROCK target has
allowed successful development of these programs through optimising molecular
properties in areas such as exposure, drug-drug interaction and selectivity.
With RXC007, we have used our medicinal chemistry expertise to selectively
target ROCK2, historically known to be a very challenging target, for the
treatment of interstitial lung disease (ILD), with an initial focus on IPF
where ROCK2 is upregulated. Taking a different approach with RXC008, we have
developed a GI-targeted ROCK1/2 inhibitor which is in preclinical development
for the treatment of fibrostenotic Crohn's disease. RXC008 is specifically
designed to avoid the potential cardiovascular side-effects of systemic
ROCK1/2 inhibition by being restricted to the GI tract with any breakthrough
rapidly degraded in plasma.
RXC007 - Currently in Phase 2a for IPF, with potential in a number of other
fibrotic conditions
RXC007, a next-generation selective inhibitor of ROCK2 commenced a Phase 2a
trial in IPF in October 2022.
The Phase 2a trial is a randomised, dose escalation study with and without
standard of care agents. Three cohorts, each consisting of 16 patients with 12
receiving RXC007, will be dosed with an escalating dose of RXC007, with the
key endpoints being safety, PK profile, changes from baseline in lung function
- Forced Vital Capacity (FVC) and Carbon Dioxide Diffusion Coefficient
(DLCO), changes from baseline in Quantitative Lung Fibrosis Score and airway
volume and resistance on high resolution computerised tomography (HRCT) scan.
The initial dosing period will last for 12 weeks; however, patients may
continue for longer if there are no signs of disease progression or toxicity.
The data collected will inform the potential dose we take forward into a
larger Phase 2b study, which will be powered to detect an efficacy signal
based on the current regulatory endpoint of FVC change over 12 months.
Recruitment into the Phase 2a study is on track with the initial safety review
for the first eight patients, dosed at 20mg BID, completed with no safety
signals to date, enabling recruitment and dose escalation to continue. The
study is currently approved in 6 countries across Europe with 14 active study
sites open and with further sites expected to be active by the end of H1 2023.
Based on current recruitment rates, we expect to report topline data during Q1
2024, as previously communicated.
In parallel with the main study, a translational science sub-study is ongoing
to demonstrate the effect on disease biomarkers. In total, 16 patients will be
recruited into this study and dosed with RXC007 for 28 days, with endpoints
including changes from baseline in blood biomarkers, proteins and genes from
broncho-alveolar lavage (BAL) fluid and BAL-fluid cells and bronchial
epithelial cells. An open IND in the US is allowing enrolment into the 28-day
translational science sub-study with longer dosing currently under an FDA
partial clinical hold pending the data readout from an ongoing nonclinical
study. The requested data, at clinically relevant doses, is expected later
this year.
Selective ROCK2 inhibition - a novel approach to fibrotic disease
Treatments for IPF have remained largely stagnant since the 2014 approval of
pirfenidone and nintedanib, both of which have been shown to slow but not halt
or reverse the effect of fibrosis, and which have significant tolerability
issues for a large percentage of patients, limiting their use.
Based on current biological knowledge, targeting downstream pathways is most
likely to be effective in treating clinically overt disease 2 . ROCK sits
downstream of a number of competitor targets including the TGF-β, CTGF and
LPA pathways, all of which signal, or partially signal, through ROCK. As a
known nodal point in these signalling cascades, by selectively targeting
ROCK2, RXC007 can act pleiotropically, an important characteristic of approved
antifibrotic compounds.
ROCK2 inhibition is now a commercially validated target with potential in
multiple disease areas, following the FDA approval and launch of the first
drug with this mechanism of action for the treatment of chronic graft versus
host disease (cGvHD).
In addition to the ongoing clinical development plan in IPF, which accounts
for around one third of patients with a significant lung pathology, we have
also generated consistently supportive preclinical data that highlights
the broad potential of next-generation ROCK2 inhibitors across a number of
fibrotic indications where there remains a significant unmet need.
We presented proof-of-concept data at the International Colloquium on Lung and
Airway Fibrosis (ICLAF) on 2 October 2022 that detailed development work in
immune mediated models of cGvHD, where the underlying disease mechanisms
that drive pathology in the model show similarities to those observed in the
lung pathology of auto-immune driven fibrotic diseases such as systemic
sclerosis and ILD. The data presented showed the pleiotropic, anti-fibrotic
effects of RXC007, which when dosed orally and therapeutically, was able to
significantly reduce skin thickness, fibrosis and collagen deposition in the
skin and lungs.
Beyond lung fibrosis, encouraging data from an ongoing collaboration with the
Garvan Institute of Medical Research (the "Garvan"), presented at the
Antifibrotic Drug Development Summit (AFDD) on 10 November 2022, showed the
potential of Redx's ROCK2 inhibitors in cancer-associated fibrosis, such as
that seen in pancreatic cancer. Post period, on 10 May 2023, preclinical data
showing the effect of RXC007 in an aggressive patient derived xenograft model
of pancreatic ductal adenocarcinoma in combination with standard of care (SoC)
chemotherapy, were presented at the Resistant Tumour Microenvironment,
Keystone Symposia. The data observed showed a striking increase in survival
when RXC007 was combined with SoC chemotherapy, compared to SoC chemotherapy
alone.
These data add to an extensive preclinical data package which supports
opportunities in multiple fibrotic indications, including the wider ILD
indications being planned for in the future Phase 2b study. They also support
the exploration of RXC007 in cancer-associated fibrosis, such as that seen in
advanced pancreatic cancer, thereby presenting a novel opportunity in a
disease area with both a high unmet need and the potential for accelerated
development in combination with standard first line chemotherapy regimens,
which we aim to commence early in 2024.
As our RXC007 clinical activities continue to mature, we have also filed a
proposed International Non-proprietary Name (INN), zelasudil, which we expect
to become active in June 2023.
RXC008 - On track for a CTA submission during H2 2023
RXC008 is a potent, oral, small molecule non-systemic GI-targeted ROCK
inhibitor designed to act exclusively in the GI tract at the site of fibrosis
in Crohn's disease. RXC008 is currently undergoing IND enabling studies to
allow the submission of a Clinical Trial Authorisation (CTA) during H2 2023,
which would allow the commencement of a first-in-man Phase 1 study in
2024.
RXC008 is a potential first-in-class treatment for fibrostenotic Crohn's
disease, for which no therapeutic treatment is currently available, meaning
patients must endure invasive, and often multiple, surgeries. RXC008 has
shown in vivo efficacy in animal fibrosis models and ex vivo efficacy in human
tissue from Crohn's disease patients.
During the period, results from adoptive transfer and chronic dextran sulphate
sodium (DSS) studies were presented at the Inflammatory Bowel Disease Nordic
(IBD Nordic) Conference in November 2022. These studies, undertaken in
collaboration with Ghent University, also incorporated the use of non-invasive
magnetic resonance imaging (MRI) texture analysis and histology to assess
reduction in tissue injury and fibrosis, and is something that we aim to use
translationally in our clinical studies moving forward. Of note, the most
compelling preclinical data were seen in a therapeutic 12-week DSS model with
a closely related GI-targeted ROCK inhibitor, REDX08087, which was able to
fully reverse fibrosis back to baseline levels when the compound was
administered orally once a day from weeks 6 to 12, once fibrosis was
established. We were able to show complete reversal of preformed GI fibrosis
as measured by trichome collagen staining, with this level of anti-fibrotic
effect the strongest we have seen in any of Redx's fibrosis models and modes
of action to date.
RXC004 - primary efficacy hypothesis in combination with anti-PD-1 expected to
read out at the end of 2023 with a view to partnering for future development
RXC004 is an orally active, once daily, Porcupine inhibitor in Phase 2
development as a targeted treatment for Wnt-ligand dependent cancers.
The primary efficacy hypothesis for RXC004 is in combination, which we are
initially exploring clinically with anti-PD-1 therapy, where it is believed to
overcome immune evasion and anti-PD-1 resistance in late-stage hard-to-treat
tumour types. However, due to its mechanism of action, there is further
potential to combine with MAPK pathway inhibitors given the significant
co-occurrence of both BRAF and KRAS mutations in Wnt-ligand dependent tumours,
as well as with chemotherapy.
The Phase 2 development programme consists of two studies, PORCUPINE,
evaluating RXC004 as both monotherapy and in combination with an anti-PD-1
checkpoint therapy, nivolumab (OPDIVO® 3 - Bristol Myers Squibb), in
genetically selected MSS mCRC; and PORCUPINE2, as monotherapy in genetically
selected pancreatic cancer and as monotherapy and in combination with
anti-PD-1 therapy, pembrolizumab (KEYTRUDA® 4 ) in unselected Biliary Tract
Cancer (BTC). The objective of the Phase 2 programme is to provide an initial
assessment of the efficacy and safety of RXC004.
During the period, we presented enabling Phase 1 combination data at the
Society for Immunotherapy of Cancer (SITC) Conference in November 2022, which
confirmed the selection of 1.5mg as the dose to take forward and duly
supported the decision to open enrolment into the Phase 2 combination
modules. Recruitment into the Phase 2 combination modules of the RXC004
programme is ongoing and we expect to report topline data at the end of 2023.
Given the highest potential opportunity to develop RXC004 is in combination,
following these data read outs Redx aims to seek a partner to develop RXC004
more broadly in combination with other agents.
On 8 March 2023, the first data from the Phase 2 programme were announced from
16 previously treated patients enrolled in the advanced unselected BTC
monotherapy arm of the PORCUPINE2 study, the primary endpoint of which was
progression free survival at six months. The initial data showed some patients
received durable clinical benefit from RXC004, consistent with clinical
activity seen in the earlier Phase 1 trial, which Redx believes is notable
given few drugs have received regulatory approval as single agents in this
treatment setting. The data also showed that the safety profile of RXC004 in
this module was consistent with that reported in Phase 1. Whilst an
encouraging demonstration of potential for RXC004's contribution to efficacy
in a combination therapy, the overall results were not sufficient to support
the further development by Redx of RXC004 as a monotherapy in BTC.
The emerging single agent profile of RXC004 with the BTC monotherapy data
reported to date is showing modest clinical benefit and supportive of the
primary efficacy hypothesis in the combination setting. In light of this, and
the fact that it has taken longer than initially anticipated to identify
patients in the genetically selected pancreatic and MSS mCRC monotherapy
modules, a trend that has been evidenced across the industry landscape, we
have made the decision to close further patient recruitment for all
monotherapy. This will enable us to prioritise both patient recruitment and
resources into the combination modules which we expect to report at the end of
2023 as planned.
Discovery Engine - Progressing towards two further INDs by end of 2025
Our approach to discovery has historically been to select biologically or
clinically validated targets where we believe our capabilities can solve
historical challenges, including those associated with resistance, dosing and
pharmacokinetics, tolerability or drug-drug interactions. This approach is
evidenced both with RXC007 which we believe has the potential to be a
best-in-class molecule, as well as the recent US FDA approval of Jaypirca™
(pirtobrutinib), during the period. Pirtobrutinib, a non-covalent (reversible)
BTK inhibitor, was originally discovered and developed by Redx 5 and is the
first Redx-discovered molecule to receive a marketing authorisation.
We continue to progress towards our goal of two further INDs by the end of
2025 and have a pipeline of undisclosed research programmes ongoing. The most
advanced of these is the Discodin Domain Receptor (DDR) programme. DDRs are
receptor tyrosine kinases containing a discoidin homology domain in their
extracellular region and which act as non-integrin collagen receptors. There
are two DDR receptors, DDR1 and DDR2, and DDR expression is increased in many
fibrotic diseases. DDRs have recently gained traction as new druggable
targets with the potential to treat multiple fibrotic conditions, including
kidney fibrosis. Redx has generated compelling preclinical data on
REDX12271, a novel, potent, selective and orally active DDR1 inhibitor, in
chronic kidney disease models, which were presented at the American Society of
Nephrology Kidney Week (ASN) in November 2022. The data presented showed that
selective inhibition of DDR1 with REDX12271 reduces inflammation and fibrosis
in prophylactic Murine Unilateral Ureteral Obstruction (UUO) models, and to
our knowledge this is the first example of selective inhibition of DDR1 with a
small molecule giving rise to efficacy in mouse UUO models.
Finance
Our cash balance at the end of the period of £34.6 million provides funding
into Q1 2024 and enables the delivery of several significant value inflection
points , including Phase 2a data in IPF. The increase in our R&D
expenditure to £16.1 million (31 March 2022: £12.9 million) results from the
expansion of our clinical trial activities. Although no milestones from
partnerships were received during the period, the revenue reported of £2.3
million is as a result of the revenue recognition from our ongoing
collaboration with Jazz Pharmaceuticals. Driven by higher R&D expenses
and lower revenue for the period, in addition to one-time reverse merger
transaction expenses, the Loss from Operations of £20.8 million was higher
than the comparative period (31 March 2022: £9.8 million).
Management remain highly focused on efficiently allocating resources,
including conducting a detailed prioritisation review of all programmes and
expenses, to ensure delivery of important value inflection points. The Board
and management continue to explore all financing and other strategic options
to extend the cash runway in the best interests of all our shareholders.
Outlook
During the period under review, we continued to advance our clinical and
preclinical programmes towards significant value inflection points, with a
focus on our industry-leading ROCK portfolio. We remain very enthused by
the data to date from our clinical portfolio, and the overall momentum within
our pipeline. Whilst disappointed that the announced merger with Jounce did
not complete, we remain well positioned to deliver multiple near-term value
inflection points. Redx retains the foundations for longer term success and
shareholder value creation and our Board will continue to explore all options
to secure the funding required to further enable this. I look forward to
reporting our progress in due course.
I would like to take this opportunity to thank our employees who continue to
drive the success of the Company through their talent and commitment, as well
as our partners and collaborators who augment our ability to deliver these
potential drugs to patients, and our shareholders who have continued to show
strong support for the Company.
Lisa Anson
Chief Executive Officer
Consolidated Statement of Comprehensive Loss
Unaudited Unaudited Audited
Half Year Half Year Year to 30 September 2022
to 31 March 2023
to 31 March 2022
Note £000 £000 £000
Revenue 2 2,311 8,353 18,690
Research and Development expenses (16,097) (12,913) (28,563)
General and Administrative expenses (4,747) (5,314) (10,229)
Reverse merger expenses 3 (2,395) - -
Exchange (losses)/gains on translation (441) 409 2,297
Other operating income 915 625 1,539
Loss from operations (20,454) (8,840) (16,266)
Finance income 5 704 8 187
Finance expense 5 (897) (850) (1,725)
Loss before taxation (20,647) (9,682) (17,804)
Income tax 6 (119) (81) (201)
Loss attributable to owners of Redx Pharma Plc (20,766) (9,763) (18,005)
Other comprehensive (loss) / income
Items that may subsequently be reclassified to profit or loss
Exchange difference from translation of foreign operations (5) 8 31
Total comprehensive loss for the period attributable to owners of Redx Pharma (20,771) (9,755) (17,974)
Plc
Pence Pence Pence
Loss per share 7 (6.2) (3.5) (6.1)
From continuing operations
- basic & diluted
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
31 March 31 March 30 September 2022
2023
2022
Note £000 £000 £000
Assets
Property, plant and equipment 2,370 3,047 2,699
Intangible assets 397 403 400
Total non-current assets 2,767 3,450 3,099
Trade and other receivables 8 5,445 4,881 5,498
Current tax 26 26 26
Cash and cash equivalents 34,610 31,583 53,854
Total current assets 40,081 36,490 59,378
Total assets 42,848 39,940 62,477
Liabilities
Current liabilities
Trade and other payables 9 6,546 5,678 5,958
Contract liabilities 10 2,582 11,044 4,893
Borrowings 11 16,526 - 15,731
Lease liabilities 649 599 623
Total current liabilities 26,303 17,321 27,205
Non-current liabilities
Borrowings 11 - 14,971 -
Lease liabilities 1,619 2,268 1,951
Total liabilities 27,922 34,560 29,156
Net assets 14,926 5,380 33,321
Equity
Share capital 12 3,349 2,753 3,349
Share premium 99,501 66,299 99,501
Share-based payment 10,431 6,746 8,199
Capital redemption reserve 1 1 1
Exchange translation reserve 55 37 60
Convertible note reserve 3,524 3,524 3,524
Retained deficit (101,935) (73,980) (81,313)
Equity attributable to shareholders 14,926 5,380 33,321
Consolidated Statement of Changes in Equity
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Share capital Share premium Share-based payment Capital redemp'n reserve Exchange translation reserve Convertible note reserve Retained deficit Total
equity
£000 £000 £000 £000 £000 £000 £000 £000
Movements by half year
At 30 September 2021 2,753 66,299 4,752 1 29 3,524 (64,226) 13,132
Loss for the period - - - - - - (9,763) (9,763)
Other comprehensive income - - - - 8 - - 8
Total comprehensive loss for the period - - - - 8 - (9,763) (9,755)
Transactions with owners in their capacity as owners
Share-based compensation - - 2,003 - - - - 2,003
Release of share options lapsed in the period - - (9) - - - 9 -
At 31 March 2022 2,753 66,299 6,746 1 37 3,524 (73,980) 5,380
Loss for the period - - - - - - (8,242) (8,242)
Other comprehensive income - - - - 23 - - 23
Total comprehensive loss for the period - - - - 23 - (8,242) (8,219)
Transactions with owners in their capacity as owners
Issue of ordinary shares 596 33,972 - - - - - 34,568
Transaction costs on issue of ordinary shares - (770) - - - - - (770)
Share-based compensation - - 2,362 - - - - 2,362
Release of share options lapsed in the period - - (909) - - - 909 -
At 30 September 2022 3,349 99,501 8,199 1 60 3,524 (81,313) 33,321
Loss for the period - - - - - - (20,766) (20,766)
Other comprehensive loss - - - - (5) - - (5)
Total comprehensive loss for the period - - - - (5) - (20,766) (20,771)
Transactions with owners in their capacity as owners
Share-based compensation - - 2,376 - - - - 2,376
Release of share options lapsed in period - - (144) - - - 144 -
At 31 March 2023 3,349 99,501 10,431 1 55 3,524 (101,935) 14,926
Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
Half Year to 31 March 2023 Half Year Year to 30 September 2022
to 31 March 2022
£000 £000 £000
Net cash flow from operating activities
Loss for the period (20,766) (9,763) (18,005)
Adjustments for:
Income tax 119 81 201
Finance costs (net) 193 842 1,538
Depreciation and amortisation 496 438 886
Share based compensation 2,376 2,003 4,365
Profit on disposal of assets - - (13)
Movements in working capital
(Increase) / decrease in trade and other receivables and contract assets (545) 8,694 7,631
(Decrease) / increase in trade and other payables and contract liabilities (1,723) 278 (5,593)
Cash (used in) / generated by operations (19,850) 2,573 (8,990)
Tax credit received 582 8 333
Interest received 601 8 187
Net cash (used in) / generated by operations (18,667) 2,589 (8,470)
Cash flows from investing activities
Sale of property, plant and equipment - - 21
Purchase of property, plant and equipment (164) (158) (262)
Net cash used in investing activities (164) (158) (241)
Cash flows from financing activities
Proceeds of share issues - - 34,568
Share issue costs - - (770)
Payment of lease liabilities (408) (408) (816)
Net cash (used in) / generated by financing activities (408) (408) 32,982
Net (decrease) / increase in cash and equivalents (19,239) 2,023 24,271
Cash and cash equivalents at the beginning of the period 53,854 29,552 29,552
Foreign exchange difference (5) 8 31
Cash and cash equivalents at the end of the period 34,610 31,583 53,854
Reconciliation of changes in liabilities arising from financing activities
Unaudited Unaudited Audited
Half Year to 31 March 2023 Half Year Year to 30 September 2022
to 31 March 2022
£000 £000 £000
IFRS16 Lease liability
Balance b/fwd 2,574 3,149 3,149
Payment of lease liabilities (408) (408) (816)
Interest on lease liabilities 102 126 241
Balance c/fwd (disclosed as current and non-current lease liabilities) 2,268 2,867 2,574
Convertible loan notes
Balance b/fwd 15,731 14,247 14,247
Interest 795 724 1,484
Balance c/fwd (disclosed as current borrowings) 16,526 14,971 15,731
Notes to the Interim Results
1. Basis of preparation and accounting policies
1.01 Description of Group and approval of the consolidated interim
financial statements
Redx Pharma Plc (''Redx" or the "Company") is a limited liability company
incorporated and domiciled in the UK. Its shares are quoted on AIM, a market
operated by The London Stock Exchange. The principal activity of the Group is
drug discovery, preclinical development and licensing.
The Group's consolidated interim financial statements are presented in pounds
sterling, which is the Group's presentational currency, and all values are
rounded to the nearest thousand (£000) except where indicated otherwise.
The consolidated interim financial statements were approved by the Board of
Directors on 16 May 2023.
1.02 Basis of preparation
The Group's consolidated interim financial statements, which are unaudited,
consolidate the results of Redx Pharma Plc and its subsidiary undertakings
made up to 31 March 2023. The Group's accounting reference date is 30
September.
The financial information contained in these interim financial statements does
not constitute statutory accounts as defined in section 434 of the Companies
Act 2006. It does not therefore include all of the information and disclosures
required in the annual financial statements. The financial information for the
six months ended 31 March 2023 and 31 March 2022 is unaudited.
The information for the period ended 30 September 2022 has been extracted from
the statutory accounts for the year ended 30 September 2022, prepared in
accordance with UK adopted International Accounting Standards in conformity
with the requirements of the Companies Act 2006. The statutory accounts were
approved by the Board on 19 December 2022 and delivered to the Registrar of
Companies. The audited financial statements of the Group in respect of the
year ended 30 September 2022 received an unqualified audit opinion and did not
contain a statement under section 498(2) or (3) of the Companies Act 2006. The
audit report included a reference to a material uncertainty that might cast
significant doubt over the Group's ability to continue as a going concern, to
which the auditors drew attention by way of emphasis without qualifying their
report.
1.03 Significant accounting policies
The accounting policies used in the preparation of the financial information
for the six months ended 31 March 2023 are in accordance with the recognition
and measurement criteria of UK adopted International Accounting Standards
("IAS") in conformity with the requirements of the Companies Act 2006 and are
consistent with those adopted in the annual statutory financial statements for
the year ended 30 September 2022.
While the interim financial information included has been prepared in
accordance with the recognition and measurement criteria of UK adopted
International Financial Reporting Standards ("IFRS"), the interim financial
statements do not include sufficient information to comply with IFRS.
1.04 Segmental information
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The Board of
Directors and the Chief Financial Officer are together considered the chief
operating decision-maker and as such are responsible for allocating resources
and assessing performance of operating segments.
The Directors consider that there are no identifiable business segments that
are subject to risks and returns different to the core business. The
information reported to the Directors for the purposes of resource allocation
and assessment of performance is based wholly on the overall activities of the
Group.
The Group has therefore determined that it has only one reportable segment.
1.05 Going concern
As part of their going concern review the Directors have followed the
guidelines published by the Financial Reporting Council entitled ''Guidance on
the Going Concern Basis of Accounting and Reporting on Solvency Risks -
Guidance for directors of companies that do not apply the UK Corporate
Governance Code''. The Directors have also taken into account recent FRC
guidance for companies in relation to going concern and Covid-19.
The Group is subject to a number of risks similar to those of other
development stage pharmaceutical companies. These risks include, amongst
others, generation of revenues in due course from the development portfolio
and risks associated with research, development, testing and obtaining related
regulatory approvals of its pipeline products. Ultimately, the attainment of
profitable operations is dependent on future uncertain events which include
obtaining adequate financing to fulfil the Group's commercial and development
activities and generating a level of revenue adequate to support the Group's
cost structure.
The Board have adopted the going concern basis in preparing these accounts
after assessing the Group's cash flow forecasts and principal risks.
At 31 March 2023 the Group held £34.6 million of cash and cash equivalents.
The Group has a history of recurring losses from operations, including a net
loss of £20.8 million for the six months ended 31 March 2023 and an
accumulated deficit of £101.9 million at that date. In addition, operational
cash outflows continue to be driven by the ongoing focus on the research,
development and clinical activities to advance the programmes within the
Group's pipeline. The Group recorded a net decrease in cash and cash
equivalents of £19.2 million for the six months ended 31 March 2023.
As part of its approval of the Group's interim financial statements for the
six months ended 31 March 2023, the Board concluded that the Group holds
sufficient cash and cash equivalents to provide a cash runway into February
2024 at currently budgeted levels and timings of expenditure and also on the
assumption that the Group's convertible loans will be converted into equity of
the Group, or that there will be an extension of the term of those convertible
loans (see further discussion below).
In undertaking the going concern review, the Board has reviewed the Group's
cash flow forecasts to 31 May 2024 (the going concern period). Accounting
standards require that the review period covers at least 12 months from the
date of approval of the financial statements, although they do not specify how
far beyond 12 months a Board should consider. Further funding is required
under the Board's long-term plan to continue to develop its product candidates
and conduct clinical trials, and the Group requires significant further
finance within this period, and is exploring a number of different options to
raise the required funding. Given these plans and requirements, a review
period of 12 months is considered appropriate.
The Board has identified and assessed downside risks and mitigating actions in
its review of the Group's cash flow forecasts. The potential requirement to
repay the convertible loan notes and the ability of the Group to raise further
capital are both circumstances outside the control of the Directors.
Accordingly, the downside risks include severe but plausible scenarios where
external fund raising is not successful, where the Group underperforms against
the business plan, and where the convertible loan notes are recalled rather
than converted or extended. Mitigating actions include the delay of operating
expenditure for research activities and restriction of certain discretionary
expenditure including capital expenditure. In the event that the convertible
loan notes are not converted or extended, the stated mitigating actions would
be insufficient such that the Group would need to raise additional capital
within the going concern period and this is outside of the control of the
Directors. Similarly, converting or extending the convertible loan notes would
not provide sufficient free cash flow to allow the Group to meet its
liabilities for at least 12 months from the date of approval of these
financial statements. Based on these conditions, the Group has concluded that
the need to raise further capital and the potential need to repay the
convertible loan notes represent material uncertainties regarding the Group's
ability to continue as a going concern.
Notwithstanding the existence of the material uncertainties, the Board
believes that the adoption of the going concern basis of accounting is
appropriate for the following reasons:
· the Directors consider it highly unlikely that the
convertible loan notes will be repaid in August 2023 given that the conversion
price of 15.5p represents a significant discount to the open market price of
Redx Pharma Plc share capital. This discount is around 52% when compared to
the share price at 11 May 2023.
· the Directors do not currently expect the convertible
loan notes to be recalled in August 2023.
· based on plans and discussions with its advisors and
investors the Directors have an expectation that further funding will be
obtained.
· the Group has a track record and reasonable near-term
visibility of meeting expectations under its collaboration agreements and
receiving milestone payments which have the potential to increase the Group's
cash runway but are not included in the Directors' assessment given they are
outside the control of management.
· the Group retains the ability to control capital and
other discretionary expenditure and lower other operational spend.
There can be no assurance that the convertible loan notes will be converted or
extended rather than recalled. If the loan notes are not converted or
extended, the Group may not have sufficient cash flows to support its current
level of activities beyond the maturity date. While the Group has successfully
accessed equity and debt financing in the past, there can be no assurance that
it will be successful in doing so now or in the future. In the event the loan
notes are recalled, or additional financing is not secured, the Group would
need to consider:
· new commercial relationships to help fund future clinical
trial costs (i.e., licensing and partnerships); and/or
· reducing and/or deferring discretionary spending on one
or more research and development programmes; and/or
· restructuring operations to change its overhead structure.
The Group's future liquidity needs, and ability to address those needs, will
largely be determined by the success of its product candidates and key
development and regulatory events and its decisions in the future. Such
decisions could have a negative impact on the Group's future business
operations and financial condition.
The accompanying financial statements do not include any adjustments that
would be required if they were not prepared on a going concern basis.
Accordingly, the financial statements have been prepared on a basis that
assumes the Group will continue as a going concern and which contemplates the
realization of assets and satisfaction of liabilities and commitments in the
ordinary course of business.
2. Revenue
Unaudited Unaudited Audited
Half year to 31 March Half year to 31 March Year to 30 September
2023 2022 2022
£'000 £'000 £'000
Revenue from milestones on scientific programmes - 6,684 10,693
Revenue from research collaboration 2,311 701 6,852
Revenue from research and preclinical development services - 968 1,145
2,311 8,353 18,690
3. Reverse merger expenses
On 23 February 2023 the Group announced a unanimously recommended business
combination with Jounce Therapeutics, Inc. ("Jounce"). Work continued on the
project until, following an unsolicited cash offer for its shares, the board
of directors of Jounce withdrew its recommendation for the combination on 27
March 2023 in favour of an acquisition by another party. Given the nature
and materiality of the expense, it has been disclosed separately within the
Consolidated Statement of Comprehensive Loss. No further expense is expected,
and the proposed transaction formally lapsed on 3 April 2023.
4. Share-based compensation
Share options have been issued to certain Directors and staff, and the charge
arising is shown below. The fair value of the options granted has been
calculated using a Black-Scholes model. 17,570,779 of the options granted are
subject to performance conditions based on scientific, clinical and commercial
milestones. There are no further conditions attached to the vesting of other
options other than employment service conditions.
Unaudited Unaudited Audited
Half Year Half Year Year to 30 September 2022
to 31 March 2023
to 31 March 2022
Number Number Number
Outstanding at the beginning of the period 36,560,098 33,577,104 33,577,104
Options granted and vested in period - - -
Options exercised in period - - (1,558,297)
Options surrendered and lapsed in period (1,283,758) (616,667) (2,283,709)
Options granted and vesting in future periods 7,300,000 2,100,000 6,825,000
Outstanding at the end of the period 42,576,340 35,060,437 36,560,098
£000 £000 £000
Charge to Statement of Comprehensive Loss in period 2,376 2,003 4,365
Assumptions used were an option life of 5 years, a risk free rate of 0.6% -
9.4% and no dividend yield. Other inputs were:
· Volatility 111% - 141%
· Share price at date of grant in a range between 25p and 81p
· Exercise price in a range between 15.5p and 81p
· Weighted average fair value of each option in a range between 21.8p
and 69.2p
At 31 March 2023, a total of 6,948,168 options were vested.
5. Finance income and expense
Unaudited Unaudited Audited
Half Year to 31 March 2023 Half Year to 31 March 2022 Year to 30 September 2022
£'000 £'000 £'000
Finance income
Bank and other short-term deposits 704 8 187
704 8 187
Finance expense
Loan interest 795 724 1,484
Interest on lease liabilities 102 126 241
897 850 1,725
6. Income tax
Unaudited Unaudited Audited
Half Year to Half Year to Year to
31 March 31 March 30 September
2023 2022 2022
£'000 £'000 £'000
Current income tax
Corporation tax 119 81 199
Amounts in respect of previous periods - - 2
Income tax charge per the income statement 119 81 201
7. Loss per Share
Basic loss per share is calculated by dividing the net income for the period
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the period. In the case of diluted amounts,
the denominator also includes ordinary shares that would be issued if any
dilutive potential ordinary shares were issued following exercise of share
options. The basic and diluted calculations are based on the following:
Unaudited Unaudited Audited
Half Year Half Year Year to 30 September 2022
to 31 March 2023
to 31 March 2022
£'000 £'000 £'000
Loss for the period attributable to the owners of the Company (20,766) (9,763) (18,005)
Number Number Number
Weighted average number of shares 334,911,458 275,282,205 294,182,774
- basic & diluted
Pence Pence Pence
Loss per share - basic & diluted (6.2) (3.5) (6.1)
The loss and the weighted average number of shares used for calculating the
diluted loss per share are identical to those for the basic loss per share.
This is because the outstanding share options would have the effect of
reducing the loss per share and would therefore not be dilutive under IAS 33
Earnings per Share.
8. Trade and other receivables
Unaudited Unaudited Audited
31 March 2023 31 March 2022 30 September 2022
£'000 £'000 £'000
Trade receivables - 356 12
VAT recoverable 667 815 909
Prepayments and other receivables 4,675 3,634 4,577
Accrued income 103 76 -
5,445 4,881 5,498
Included within prepayments other receivables at March 2022, September 2022
and March 2023 is another receivable of £0.6 million which is due after
more than one year.
9. Trade and other payables
Unaudited Unaudited Audited
31 March 2023 31 March 2022 30 September 2022
£'000 £'000 £'000
Trade payables 2,181 2,201 2,792
Employee taxes and social security 268 224 250
Other payables 31 9 18
Accruals 4,066 3,244 2,898
6,546 5,678 5,958
10. Contract liabilities
Unaudited Unaudited Audited
31 March 2023 31 March 2022 30 September 2022
£'000 £'000 £'000
Contract liabilities 2,582 11,044 4,893
Reconciliation
Balance b/fwd 4,893 4,318 4,318
Contract asset debtor received - 7,427 7,427
Transfer to revenue (2,311) (701) (6,852)
2,582 11,044 4,893
The contract liability relates to a single research collaboration contract.
11. Borrowings
Unaudited Unaudited Audited
31 March 2023 31 March 2022 30 September 2022
£'000 £'000 £'000
Convertible loan notes
Current 16,526 - 15,731
Non-current - 14,971 -
16,526 14,971 15,731
On 4 August 2020 Redx Pharma Plc issued convertible loan notes with a value of
£22.2m. No interest is payable during the first 3 years, thereafter it is
payable at a maximum rate equal to the US prime rate at that time. The notes
are convertible into Ordinary shares of Redx Pharma Plc, at any time at the
option of the holder, or repayable on the third anniversary of the issue. The
conversion rate is 1 Ordinary share for each £0.155 of convertible loan note
held. The convertible loan notes are secured by a fixed and floating charge
over all the assets of the Group.
As of 31 March 2023, an aggregate of £17.1 million in principal amount was
outstanding under the convertible loan notes. This equates to 110,288,887
Ordinary shares at £0.155 per share.
The remaining gross principal of £17.1 million has been discounted at the
effective interest rate determined on initial measurement, resulting in a
discounted liability of £16.5 million (March 2022 £15.0 million, September
2022: £15.7 million).
12. Share capital
Unaudited Unaudited Audited
Half Year Half Year Year to 30 September 2022
to 31 March 2023
to 31 March 2022
Number Number Number
Number of shares in issue 334,911,458 275,282,205 275,282,205
In issue at 1 October
Issued for cash - - 58,070,956
Exercise of share options - - 1,558,297
334,911,458 275,282,205 334,911,458
£'000 £'000 £'000
Share capital at par, fully paid 3,349 2,753 3,349
Ordinary shares of £0.01
13. Post period end events
On 3 April 2023, Redx Pharma Plc confirmed the formal lapse of the proposed
business combination with Jounce Therapeutics, Inc. All cost relating to the
transaction had been incurred prior to 31 March 2023 and are disclosed within
these interim results.
FURTHER INFORMATION FOR SHAREHOLDERS
AIM: REDX
Company number: 07368089
Investor website: http://redxpharma.com/investors (http://redxpharma.com/investors)
Registered office: Block 33, Mereside, Alderley Park, Macclesfield, SK10 4TG
Directors: Dr Jane Griffiths (Chair)
Lisa Anson (CEO)
Peter Presland (Non-Executive Director)
Dr Bernhard Kirschbaum (Non-Executive Director)
Sarah Gordon Wild (Non-Executive Director)
Dr Thomas Burt (Non-Executive Director)
Natalie Berner (Non-Executive Director)
Dr Rob Scott (Non-Executive Director)
Company Secretary: Claire Solk
END
1 KEYTRUDA® is a registered trademark of Merck Sharp & Dohme LLC, a
subsidiary of Merck & Co., Inc., Rahway, NJ, USA
2
https://invivo.pharmaintelligence.informa.com/IV147701/Harbingers-For-IPF-Drug-Development?utm_source=dailyem&utm_medium=email&utm_term=&utm_campaign=&utm_medium=email&utm_source=sfmc&utm_campaign=In+Vivo+Daily+(Tues+-+Fri)&utm_id=4641751&sfmc_id=204119729
(https://invivo.pharmaintelligence.informa.com/IV147701/Harbingers-For-IPF-Drug-Development?utm_source=dailyem&utm_medium=email&utm_term=&utm_campaign=&utm_medium=email&utm_source=sfmc&utm_campaign=In+Vivo+Daily+(Tues+-+Fri)&utm_id=4641751&sfmc_id=204119729)
3 OPDIVO® is a registered trademark of Bristol-Myers Squibb Company
4 KEYTRUDA® is a registered trademark of Merck Sharp & Dohme LLC, a
subsidiary of Merck & Co., Inc., Rahway, NJ, USA
5 The asset was subsequently sold outright to Loxo Oncology, now part of Eli
Lilly, Redx has no remaining economic interest Jaypirca™ is a trademark
owned by or licensed to Eli Lilly and Company, its subsidiaries, or affiliates
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