TIDMREDX
RNS Number : 9116W
Redx Pharma plc
15 December 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")
Final Audited Results for Year Ended 30 September 2023
Zelasudil enters Phase 2a clinical programme in IPF and delivers
compelling preclinical data in other fibrotic indications
IND-enabling studies and regulatory submission completed for
RXC008
Refined strategy to focus on advancing differentiated ROCK
inhibitor portfolio
Post-period financing extends cash runway into Q3 2024
Alderley Park, UK, 15 December 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 today announces audited
financial results for the year ended 30 September 2023.
Lisa Anson, Chief Executive Officer, Redx Pharma, commented: "We
are pleased to report significant progress across our pipeline of
clinical and pre-clinical assets. Commencing our Phase 2a IPF
clinical trial for our lead asset zelasudil, formerly RXC007,
underscores our commitment to advancing our differentiated
ROCK-inhibitor portfolio. During the year, we presented compelling
preclinical data that demonstrate the potential of zelasudil in
several other fibrotic indications that we intend to investigate
further in the future. We are also pleased to confirm the
submission of a CTA for our second ROCK asset, RXC008, for which we
expect to commence a Phase 1 study early in 2024.
Despite the ongoing challenges in the equity markets and broader
economic landscape, post-period we were pleased to secure a GBP14.1
million (GBP13.6 million net) equity financing with existing
institutional investors which extends our cash runway into Q3 2024
and will allow us to deliver multiple near-term value inflection
points, in line with our refined strategic focus.
I would like to take this opportunity to again thank our
shareholders for their ongoing support, and our employees whose
dedication make our achievements possible."
Operational Highlights:
Significant pipeline prioritisation review undertaken with
strategic focus refined to the advancement of differentiated Rho
Associated Coiled-Coil Containing Protein Kinase (ROCK) inhibitor
portfolio through the next stages of clinical development, with
RXC004 identified for partnership.
-- Initiated a Phase 2a clinical study for zelasudil (RXC007), a
selective ROCK2 inhibitor being developed for fibrotic disease.
o In October 2022, first patient enrolled into Phase 2a clinical
study in patients with idiopathic pulmonary fibrosis (IPF).
Recruitment into first cohort of patients with dosing at 20 mg BID
was completed with no safety or tolerability findings that
precluded dose escalation;
o Post-period, recruitment into the 50 mg BID cohort was
completed, with dosing ongoing. A decision on the dose level for a
potential third cohort of patients will be made in Q1 2024
following the next safety data review;
o In October 2022, preclinical efficacy data showing pleiotropic
effects of RXC007 in chronic graft versus host disease (cGvHD) was
presented at the International Colloquium on Lung and Airway
Fibrosis (ICLAF);
o In November 2022, further preclinical data was presented at
the Antifibrotic Drug Discovery (AFDD) Meeting showing the
potential of ROCK2 inhibition in lung fibrosis, other fibrotic
diseases and cancer-associated fibrosis;
o In May 2023, data from preclinical models of pancreatic ductal
adenocarcinoma (PDAC) in combination with chemotherapy were
presented at the Resistant Tumour Microenvironment, Keystone
Symposia, which showed an increase in survival compared to single
agent standard of care alone;
o In August 2023, the Company announced that the US Food and
Drug Administration (FDA) granted zelasudil Orphan Drug Designation
for IPF.
o In September 2023, FDA Type A meeting confirmed that design of
ongoing investigative dog study is suitable to meet the
requirements to potentially lift the partial clinical hold and
allow dosing durations greater than 28-days in the US in future
clinical studies.
-- Advanced RXC008, a GI-targeted ROCK inhibitor for the
treatment of fibrostenotic Crohn's disease, through IND-enabling
studies and post-period submitted a Clinical Trial Application
(CTA), with the commencement of a Phase 1 study expected in early
2024.
o In November 2022, preclinical data presented at the
Inflammatory Bowel Disease (IBD) Nordic Conference showed RXC008
can supress fibrosis and attenuate tissue injury in animal models
of GI-fibrosis; and has the potential to be developed as a novel
therapy to inhibit fibrotic stricture formation in Crohn's
disease.
-- Closed recruitment into Phase 2 programmes for RXC004, a
Porcupine inhibitor for the treatment of Wnt-ligand dependent
cancers, with partnership being sought following Phase 2 data
readout.
o In November 2022, presented Phase 1 data from combination
module of RXC004 PORCUPINE study in genetically selected patients
with microsatellite stable metastatic colorectal cancer (MSS mCRC)
and opened patient enrolment for Phase 2 combination modules;
o In December 2022, a clinical trial collaboration and supply
agreement with MSD (Merck & Co., Inc., Rahway, NJ, USA)
announced for the supply of KEYTRUDA(R)(1) (pembrolizumab) for the
combination arm of the PORCUPINE2 study in Biliary Tract
Cancer;
o In March 2023, topline data from PORCUPINE2 monotherapy
Biliary Tract Cancer module was announced showing some patients
received durable clinical benefit with overall safety and efficacy
profile as seen in the Phase 1 study;
o In October 2023, confirmed that recruitment had been closed
into all PORCUPINE and PORCUPINE2 modules, with data readout
expected H1 2024.
-- Delivered novel drug candidate programmes from core medicinal chemistry expertise.
o In October 2023, announced nomination of a new development
candidate, RXC009, a Discoidin Domain Receptor 1 (DDR1) inhibitor
for the treatment of chronic kidney disease;
o In October 2023, announced a KRAS (Kirsten rat sarcoma virus)
inhibitor programme in early development targeting both G12D
selective and multi-KRAS profiles.
o In November 2023, presented preclinical data from RXC009 at
the American Society for Nephrology (ASN) Annual Meeting which
showed that in a therapeutic unilateral ureteral obstruction (UUO)
murine model of kidney fibrosis RXC009 treatment resulted in a
significant reduction in histological markers of both inflammation
and fibrosis.
-- Management team and Board of Directors changes during the year.
o In July 2023, Dr. Thomas Burt, a representative of Sofinnova
Crossover I SLP ("Sofinnova") informed the Board of Directors of
his intention to resign effective 1 September 2023; on 6 September
2023 the appointment of Dr. Joseph Anderson as a Sofinnova
representative was confirmed;
o Effective 30 September 2023, Sarah Gordon-Wild resigned as an
independent Non-Executive Director for personal reasons;
o Post-period, Dr. Jane Robertson informed the Company of her
intention to step down as Chief Medical Officer (CMO) to return to
a clinical setting. Jane will remain an advisor to the Company and
from 1 January 2024, Dr. Helen Timmis will be appointed Interim CMO
until further notice.
Financial Highlights:
-- Cash balance at 30 September 2023 of GBP18.1 million (30 September 2022 GBP53.9 million);
-- Post-period a GBP14.1 million (gross) GBP13.6 million (net)
equity financing was secured with existing institutional investors
at market price to fund the near-term value inflection points,
providing cash runway into Q3 2024;
-- Significant investment in research and development activities
led to overall expenditure of GBP34 million (FY 2022: GBP34.4
million)(2) ;
-- Loss for the period of GBP33.2 million (FY 2022 GBP18.0 million);
-- Extension to the term of the convertible loan notes, issued
by the Company to both RM Special Holdings 3, LLC ("Redmile") and
Sofinnova Crossover I SLP ("Sofinnova") until August 2024, under
the terms and conditions of the original agreement.
-- In April 2023, a recommended all-share business combination
with Jounce Therapeutics, Inc. ("Jounce"), 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 a third-party.
The person responsible for the release of this announcement on
behalf of the Company is Nischal Hindia, Interim Company
Secretary.
For further information, please
contact:
Redx Pharma Plc T: +44 (0)1625 469 918
UK Headquarters
Caitlin Pearson, Head of Communications
ir@redxpharma.com
Lisa Anson, Chief Executive Officer
US Office
Peter Collum, Chief Financial
Officer
SPARK Advisory Partners (Nominated T: +44 (0)203 368 3550
Adviser)
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 T: +44 (0)207 886 2500
Broker)
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, zelasudil (RXC007), is in
development for interstitial lung disease and is undergoing a Phase
2a trial for idiopathic pulmonary fibrosis (IPF) with topline data
expected in H1 2024. The Company's second fibrosis candidate,
RXC008, a GI-targeted ROCK inhibitor for the treatment of
fibrostenotic Crohn's disease, is progressing towards the clinic
with a Clinical Trial Application (CTA) submitted during the fourth
quarter of 2023. 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 Phase 2
anti-PD-1 combination data during the first half of 2024, following
which Redx will seek a partner for ongoing development.
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 wholly-owned clinical-stage product candidates and
discovery 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/ .
1. Registered trademark of Merck & Co., Inc.,
2. Excluding share based charges and extraordinary costs
Chair's Statement
Dear Shareholder,
I am pleased to report a successful, although challenging, year
for Redx, as we have continued to progress our pipeline, building
on our scientific strengths to deliver our corporate strategy and
ending the year with a positive trajectory into 2024 .
Our ambition is to create world-leading medicines that will
transform patients' lives. By leveraging our distinguished
medicinal chemistry and translational science expertise, we can
create best-in-class or first-in-class treatments for unmet medical
needs. During the year we undertook a detailed pipeline
prioritisation review which resulted in an increased focus on
driving our differentiated ROCK inhibitor portfolio through the
next stages of clinical development. Alongside this, to ensure that
we optimally deploy our resources and management focus, we made the
strategic decision to partner our Porcupine inhibitor, RXC004. As
our ROCK assets have progressed, we have required increased
resources to develop them, requiring us to be even more focused in
our portfolio prioritisation.
During the period, Redx made significant clinical and regulatory
progress against this strategy, with k ey achievements
including:
-- Zelasudil (RXC007) initiated ongoing Phase 2a study - our
selective ROCK2 inhibitor, is being developed for interstitial lung
diseases (ILD) including idiopathic pulmonary fibrosis (IPF) a
life-threatening orphan disease with poor prognosis.
-- RXC004 closed recruitment for Phase 2 programme - our
Porcupine inhibitor is being developed as a targeted therapy for
Wnt-ligand dependent cancers in combination with immunotherapies
and potentially other agents.
-- RXC008 successfully completed IND-enabling studies and
submitted a CTA - our Gastro-Intestinal (GI)-targeted ROCK
inhibitor for the treatment of fibrostenotic Crohn's disease.
-- Investment in our Redx discovery engine continued and
post-period we nominated our Discoidin Domain Receptor 1 (DDR1)
inhibitor as our next development candidate, RXC009.
Post-period, in October 2023, we announced a GBP14.1 million
(gross), GBP13.6 million (net) financing which was supported by
existing institutional shareholders including Redmile, Sofinnova,
Polar and Invus. This financing will support key milestones
including the Phase 2a IPF data readout for zelasudil, as well as
enabling RXC008 to commence a Phase 1 healthy volunteer study in
early 2024. Although disappointed that our proposed business
combination with Jounce Therapeutics did not complete, we believe
we are well-positioned to deliver long-term success and shareholder
value creation.
During the year, the composition of our Board was changed
following the resignations of Dr. Thomas Burt and Sarah
Gordon-Wild, and I would like to personally thank both Thomas and
Sarah for their invaluable support to the Board and the Company
throughout their tenures. I would also like to welcome Dr. Joseph
Anderson who has joined the Board as a representative of Sofinnova,
in place of Thomas Burt.
Our experienced management team led by our CEO, Lisa Anson, has
continued to implement a successful corporate strategy aimed at
getting our novel, differentiated drug candidates into the clinic.
We have a strong internal team who can support these efforts and
who continue to guide the Company towards its ambition and I would
like to take this opportunity to thank all Redx employees
throughout the year for their resilience, high-standards and
teamwork - it is the ultimate foundation of our success.
Likewise, I would like to extend my gratitude to our
shareholders, particularly those who supported the Company through
our recent financing which is fundamental to our ability to
progress our pipeline and deliver the next key milestones.
I am proud of the significant progress we have made in the last
12 months and remain enthused about the multiple value inflection
points that we have in the near term, and I look forward to
continuing to report our achievements throughout 2024.
Dr Jane Griffiths
Chair, Board of Directors
Chief Executive's Report
Over the last 12 months we have demonstrated strong momentum in
progressing our clinical programmes and bringing forward novel drug
candidates in line with our core strategy of developing potential
best-in-class or first-in-class therapeutics in areas of high unmet
medical need.
During the year, we have strategically prioritised the
progression of our differentiated Rho Associated Coiled-Coil
Containing Protein Kinase (ROCK) portfolio through the next stages
of clinical development, where we see significant opportunities as
potential best- or first-in-class treatment options in fibrotic
diseases. To optimally deploy our resources and management focus,
we undertook a significant pipeline prioritisation review and have
decided to seek partners for a number of assets for further
development, including our clinical-stage Porcupine inhibitor,
RXC004.
We are now a well-established, clinical-stage biotechnology
company with two assets, zelasudil (RXC007) and RXC004, in Phase 2
development, with data from both programmes expected during the
first half of 2024. We have also progressed a third programme,
RXC008, through Investigational New Drug (IND)-enabling studies and
expect to commence a Phase 1 study in healthy volunteers early in
2024.
We continue to demonstrate the strength of our medicinal
chemistry expertise as we execute on our ambition to create world
leading medicines that transform patients' lives, and we have
advanced a number of novel, differentiated drug candidates in our
development pipeline. Post-period, in October 2023, we nominated
our next development candidate, RXC009, a potent and selective
Discoidin Domain Receptor 1 (DDR1) inhibitor; and announced our
Kirsten rat sarcoma virus (KRAS) inhibitor programme, which is
currently in lead optimisation.
In October 2023, we were also delighted to announce a GBP14.1
million (gross), GBP13.6 million (net) financing supported by
existing institutional investors. These funds will allow us to
progress our assets through the next stages of clinical development
and important value inflection milestones, as outlined below.
Strategic Focus on Advancing Our Differentiated ROCK Inhibitor
Portfolio with Lead Asset Zelasudil (RXC007)
Our lead asset is zelasudil (RXC007), a highly selective ROCK2
inhibitor being developed as a potential best-in-class fibrosis
treatment for conditions such as Idiopathic Pulmonary Fibrosis
(IPF). ROCK2 is a biologically- and clinically-validated target
that has been shown to sit at a nodal point in cell signalling
pathways thought to be central to fibrosis. We have a robust
preclinical data package for zelasudil which shows anti-fibrotic
effects across multiple industry-standard in-vivo preclinical
models demonstrating its potential for efficacy in progressive
fibrotic interstitial lung diseases (ILD), in highly fibrotic
tumours such as pancreatic cancer, and in widespread multi-organ
fibrosis, such as chronic Graft versus Host Disease (cGvHD) and
systemic sclerosis.
Phase 2a Study in IPF Initiated with Two Cohorts Recruited
Our initial development focus for zelasudil is in IPF, given the
evidence of the upregulation of ROCK2, along with our strong
package of supportive preclinical data.
IPF is a severe and life-threatening disease for which there is
currently no cure and where the current standard of care
treatments, pirfenidone and nintedanib, have significant side
effects limiting their use in over 50% of IPF patients. Therefore,
there is an extremely high unmet need for new therapeutic treatment
options for these chronically ill patients.
In October 2022, we announced that the first patient had been
enrolled in the Phase 2a IPF clinical study for zelasudil. This
study is a randomised, double-blind, placebo-controlled, dose
ranging study which will provide early efficacy readouts and
evaluate the safety and tolerability of zelasudil in IPF patients
with or without standard IPF therapy. Cohorts of 16 patients will
be treated at each selected dose level with a 3:1 ratio between
zelasudil and placebo. Within each cohort, a minimum of four
patients will be on nintedinib and four on pirfenidone as standard
treatment. Each cohort has a 12-week dosing duration with an option
to continue for a further 12-weeks in an open label extension.
Recruitment into the first cohort of patients, dosing at 20mg
BID, was successfully completed with no safety or tolerability
findings that precluded dose escalation. Post-period, recruitment
into a second cohort of patients at 50 mg BID was completed, with
dosing ongoing. A decision will be made in Q1 2024 on the dose
level for a potential third cohort of patients following the next
data review. The study, which is being conducted in the UK and
seven other European countries, is expected to report topline data
during H1 2024, once all enrolled patients have completed the
initial dosing period.
In August 2023, the US Food and Drug Administration (FDA)
granted zelasudil Orphan Drug Designation for the treatment of IPF
which will, in time, allow us to benefit from various development
and commercial incentives, including market exclusivity. At this
time, under our open IND in the US, dosing for longer than 28-days
is under an FDA partial clinical hold based on skeletal muscle
findings in dog toxicology studies. We held a Type A meeting with
the FDA to confirm that the design of our ongoing 13-week
investigative dog study will meet their requirements with the main
objective of the study being to show that the skeletal muscle
findings seen in the dogs are monitorable and reversible. To date,
no similar findings have been observed in humans or other species
at any dose. It is expected that a complete response will be
submitted to the FDA during Q2 2024 which could allow the partial
hold to be lifted, and potentially allow longer-term dosing to take
place in the US in future clinical studies.
Following completion of the main 12-week Phase 2a study, we
intend to initiate a 28-day translational science sub-study to
evaluate key translational science endpoints such as
treatment-related changes in fibrosis-related proteins from
broncho-alveolar lavage (BAL) fluid and gene expression changes in
bronchial epithelial cells. Up to 16 patients will be recruited
into this translational science sub-study, which will be undertaken
at specialist centres in the UK and the US.
Robust Preclinical Data Package Supporting Broader Development
in Fibrotic Indications
Due to the pleiotropic mechanism of action of zelasudil,
resulting from the nodal positioning of ROCK2 within cell
signalling pathways, we have established a robust preclinical data
package supporting multiple life cycle management opportunities in
a range of fibrotic indications.
Initially, we see a major opportunity in cancer-associated
fibrosis, or fibrotic oncology, alongside anti-tumour agents
including chemotherapy. We have undertaken several preclinical
studies and, in May 2023, presented preclinical data from our
pancreatic cancer models, undertaken with our collaboration
partner, the Garvan Institute of Medical Research (Garvan), at the
Resistant Tumour Microenvironment, Keystone Symposia.
Pancreatic cancer is known to be a highly fibrotic tumour type
which is hard-to-treat, with limited treatment options. The
preclinical data presented at the Keystone Symposia were from a
pancreatic ductal adenocarcinoma (PDAC) model which showed that
zelasudil in combination with gemcitabine/Abraxane(R)(1) in
metastatic and high-extra cellular matrix (ECM) patient-derived
PDAC models, increased survival compared to single agent standard
of care alone. Furthermore, data from a chemotherapy-resistant
patient derived model in which collagen content is increased upon
development of resistance showed that a close analogue of
zelasudil, REDX10616, in combination with FOLFIRINOX re-sensitised
the tumour to treatment and led to a striking increase in
survival.
REDX10616 has the potential to be developed separately for
oncology, however, our current focus is on our clinical-stage
asset, zelasudil. These data, taken together and reviewed with
other preclinical data generated, show the potential of zelasudil
as a treatment for cancer-associated fibrosis in combination with
standard of care. Our plan is to investigate this potential further
in a Phase 1b/2 study, which we hope to initiate in 2024.
Beyond cancer-associated fibrosis, we have a compelling
preclinical data package in chronic graft versus host disease
(cGvHD), where there is a precedent of ROCK2 inhibition treatment
following the FDA approval of belumosudil in August 2021.
Preclinical data were presented at the International Colloquium on
Lung and Airway Fibrosis (ICLAF) in October 2022 and at the
Antifibrotic Drug Discovery (AFDD) Meeting in November 2022, which
showed the anti-fibrotic effects of zelasudil in the murine
sclerodermatous GvHD model which recapitulates aspects of human
scleroderma with prominent skin thickening, upregulation of
cutaneous collagen and lung fibrosis. Furthermore, the underlying
disease mechanisms that drive pathology in the model show
similarities to those observed in auto-immune driven fibrotic
diseases such as systemic sclerosis and interstitial lung disease
(ILD). Zelasudil, dosed orally and therapeutically, was able to
significantly reduce skin thickness, fibrosis and collagen
deposition in the skin and lungs as measured by hydroxyproline.
These data lead us to believe that zelasudil has potential for
efficacy in progressive fibrotic interstitial lung diseases, cGvHD
and systemic sclerosis; and we will continue to look at
opportunities in this area as part of our clinical development plan
for zelasudil.
Progressing RXC008 Towards the Clinic as a First-In-Class
Opportunity
Our second ROCK inhibitor programme is RXC008, a GI-targeted
ROCK inhibitor with first-in-class potential in fibrostenotic
Crohn's disease. The current management of fibrotic strictures of
the gastrointestinal tract is primarily surgical as no drugs are
specifically approved for the underlying fibrosis, which can
progress despite intervention with anti-inflammatory therapies.
RXC008 is expected to enter clinical development in early 2024,
commencing a Phase 1 study in healthy volunteers.
RXC008 is a potent, oral, small molecule non-systemic ROCK 1/2
inhibitor. RXC008 avoids the significant cardiovascular side
effects of pan-ROCK inhibitors, including tachycardia and
hypotension, by being restricted to the GI-tract via high efflux
and low permeability. This results in virtually no systemic
breakthrough, with the molecule being rapidly metabolised by
paraoxonase enzymes in the plasma should any breakthrough occur
under particular circumstances.
In November 2022, we presented preclinical data from adoptive
transfer and chronic dextran sulphate sodium (DSS) studies of
RXC008 at the Inflammatory Bowel Disease (IBD) Nordic Conference.
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 seen in any of Redx's fibrosis models and modes of
action to date.
Further to this, we have undertaken work in collaboration with
Ghent University to incorporate the use of non-invasive magnetic
resonance imaging (MRI) texture analysis and histology to assess
reduction in tissue injury and fibrosis, which we hope to use
translationally in our clinical studies moving forward. If
successful, this could lead to a reduction in the number of
invasive surgical procedures Crohn's patients require.
Phase 1 Healthy Volunteers Study Expected to Commence H1
2024
Significant progress was made during the year with the RXC008
IND-enabling programme.
In August 2023, we held a scientific advisory meeting with the
UK Medicines and Healthcare products Regulatory Agency (MHRA) to
review the preclinical data package and we can confirm that
post-period, the CTA for RXC008 was submitted and we expect to
commence a Phase 1 healthy volunteers study in early 2024.
We held a series of meetings with key opinion leaders and
created a specific Scientific Advisory Board to review the Phase 1
study protocol, as well as to discuss the overall clinical
development plans beyond Phase 1. We have been pleased by the
interest from clinicians in this area, and the support from
clinical bodies such as the Science, Translational & Clinical
Andrology Research (STAR) consortium.
The Phase 1 study will be split into two parts. The first part
will consist of a single and multi-ascending dose in healthy
volunteers dosed over 14 days with safety as the primary endpoint.
The study will also evaluate pharmacokinetics (PK), including data
on faeces, plasma and tissue in the highest multi-ascending dose
cohort. Following completion of this first part of the study, we
aim to initiate a second part in patients with fibrostenotic
Crohn's disease. This will consist of a one-month dosing period to
show safety, PK - confirming minimal systemic exposure in patients
- target engagement and biomarkers in paired biopsies from the
terminal ileum and colon, and changes in circulating
biomarkers.
Fibrostenotic Crohn's disease affects 1.7 million patients
globally(2) , with 50% developing fibrotic strictures within 10
years of treatment(3) . There are currently no approved therapies
for the underlying fibrosis therefore, with our preclinical data
package and key opinion leader input to date, we are excited about
the potential of RXC008 in this hard-to-treat indication.
RXC004 - Strategic Decision to Partner the Programme
As outlined above, during the period, the Company undertook a
detailed prioritisation review of all programmes and expenses to
ensure the delivery of important value inflection points whilst
efficiently allocating resources to allow programmes to continue.
As part of this review, we nominated RXC004 to be partnered for any
further development.
RXC004 - Phase 2 Recruitment Closed with Data Expected H1
2024
RXC004 is a clinical-stage, highly potent and selective, orally
active, once-daily Porcupine inhibitor being developed as a
targeted therapy for Wnt-ligand dependent cancer. Aberrations in
the Wnt pathway directly contribute to tumour growth and play an
important role in immune resistance, in particular to treatment
with immuno-oncology agents such as PD-1 checkpoint inhibitors. We
designed the RXC004 Phase 2 clinical programme to evaluate RXC004
as monotherapy and in combination with anti-PD-1 therapy to provide
an initial assessment of efficacy and safety.
The first study, PORCUPINE, has been evaluating RXC004 as
monotherapy and in combination with anti-PD-1 therapy OPDIVO(TM)(4)
(nivolumab) in patients with relapsed microsatellite stable
metastatic colorectal cancer (MSS mCRC) with upstream Wnt pathway
activation by RNF43 mutations or RSPO2/3 fusions. The second study,
PORCUPINE2, was designed to evaluate RXC004 as a monotherapy in
patients with RNF43 mutated advanced pancreatic cancer, and as a
monotherapy and in combination with anti-PD-1 KEYTRUDA(R)(5)
(pembrolizumab) in unselected patients with biliary tract cancer
(BTC). In December 2022, we announced a clinical trial
collaboration and supply agreement with MSD (Merck & Co., Inc.,
Rahway, NJ, USA) for the supply of pembrolizumab for this
study.
In March 2023, we announced initial topline data from the BTC
monotherapy module of the PORCUPINE2 study. The data was from 16
previously treated patients with advanced BTC, with a primary
endpoint of progression free survival at six months. The clinical
activity and safety profile seen in these patients was consistent
with that seen in the Phase 1 trial, as presented at the European
Society for Medical Oncology (ESMO) Congress in 2021.
Some patients in this cohort received durable clinical benefit
from treatment with RXC004, and retrospective analysis of all
efficacy and biomarker data in this BTC monotherapy cohort will
increase the understanding of the single agent activity of RXC004
and will be used to aid interpretation of the combination module
efficacy. Whilst results were consistent with our hypothesis that
RXC004 has potential as an active component of combination therapy,
they were not sufficient to support the further development of
RXC004 as a single agent for relapsed BTC.
In line with the industry-wide recruitment challenges seen for
rare subsets of genetically selected patients, we took the decision
in May 2023 to close recruitment into the genetically selected
monotherapy modules to prioritise resources to the combination
modules; and in October 2023, we confirmed that we had closed
recruitment into the combination modules. We expect to report data
from these studies in H1 2024, once data cleaning activities are
complete and the translational results are available.
Following this, as announced at our Interim results in May 2023,
we will seek a partnership for this asset to continue its
development post-Phase 2, which could include combining more
broadly with other agents.
Discovery Engine Continues to Deliver Novel Drug Candidates
Our discovery engine continues to produce novel drug candidates
against clinically- or biologically-validated targets to bring new
treatment options in areas of high unmet medical need, as we aim to
produce best-in-class or first-in-class molecules. Our medicinal
chemistry and translational science expertise is validated by our
track record of producing five molecules which have entered the
clinical stage of development. In January 2023, we were delighted
that the first of these, Jaypirca(TM)(6) (pirtobrutinib, RXC005,
LOXO-305), that was discovered and developed by Redx before being
divested to Loxo Oncology, now part of Eli Lilly, in 2017, was
approved by the US FDA for the treatment of mantle cell lymphoma.
Pirtobrutinib, a non-convalent (reversible) Bruton Tyrosine Kinase
(BTK) inhibitor, is the first BTK inhibitor of this kind to be
approved by the FDA and in April 2023, the drug also received a
positive opinion from the European Committee for Medicinal Products
for Human Use (CHMP).
During the year significant progress was made in two key areas
of focus for our discovery teams: Discoidin Domain Receptor
Inhibitors and KRAS inhibitors.
Discoidin Domain Receptor (DDR) Inhibitor Programme Delivers
Development Candidate, RXC009
Post-period, in October 2023, we nominated our DDR1 selective
inhibitor as our next development candidate, RXC009, for the
treatment of chronic kidney disease (CKD).
RXC009 is a highly potent and selective DDR1 inhibitor. 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 as DDR
expression is increased in many fibrotic diseases including kidney
fibrosis, they have recently gained traction as new druggable
targets. We have developed potent and selective small molecule DDR
inhibitors with drug-like characteristics and have several ongoing
programmes in this area.
In November 2022, we presented data from our lead optimisation
molecule REDX12271 at the American Society of Nephrology Kidney
Week (ASN), which showed that selective inhibition of DDR1 with
REDX12271 reduces inflammation and fibrosis in prophylactic Murine
Unilateral Ureteral Obstruction (UUO) models.
We returned to ASN in November 2023 to present data from our
newly-nominated development candidate, RXC009, in a therapeutic
murine UUO model. These data confirmed that RXC009 treatment
resulted in a significant reduction in histological markers of both
inflammation and fibrosis in these models of kidney fibrosis.
Target engagement was also demonstrated with a reduction in
phospho-DDR1 (p-DDR1), and RXC009 has a favourable absorption,
distribution, metabolism and excretion (ADME) and safety profile.
As patients suffering with CKD are often on multiple supportive
medications, the drug-drug interaction (DDI) profile of RXC009 is
extremely important and we were therefore pleased that a DDI
assessment confirmed its suitability for potential use in
combination with other treatment options.
To date, no selective inhibitors of DDR1 have entered the
clinic, so we believe that RXC009 has the potential to be a
first-in-class treatment option for kidney fibrosis associated with
CKDs such as nephropathy, focal sclerosing glomerulonephritis,
diabetic nephropathy and Alport Syndrome, an inherited rare disease
for which there are currently no specific approved treatment
options.
KRAS (Kirsten rat sarcoma virus) Inhibitor Programme in Lead
Optimisation
Post-period, in October 2023, we also announced that our latest
research programme is a KRAS inhibitor targeting both G12D
selective and multi-KRAS profiles. Rat sarcoma virus (RAS) is the
most frequently mutated oncogene across different cancer types,
with KRAS mutations accounting for approximately 85% of these
mutated oncogenes. Therefore, KRAS inhibitors targeting multiple
commonly-occurring mutations may offer a treatment option for large
segments of colorectal, pancreatic and lung cancer patients who
currently have limited treatment options. Developing
orally-bioavailable agents with dosing that allows for long term
target coverage, and thus reduced risk of resistance, is a key
opportunity for the next wave of KRAS-targeting agents that act
beyond the G12C mutation.
We have filed multiple patent applications claiming distinct
chemical series with KRAS activity, having generated encouraging
early data from in-vitro models. We continue to further expand the
preclinical data package which we hope to present at a conference
during 2024 as we work towards nominating a development
candidate.
Partnered Programmes Continue to Progress
Our ability to secure meaningful partnerships is demonstrated by
our strong track record which includes partnerships with
AstraZeneca and Jazz Pharmaceuticals (Jazz), as well as an ongoing
research collaboration with Jazz. We have near-term potential
milestones of $15 million from these ongoing partnerships.
All of these programmes continue to progress, with Jazz
confirming in November 2022 that the first patient had been dosed
in the Phase 1 clinical trial of JZP815, the pan-RAF inhibitor
programme developed by Redx and acquired by Jazz in 2019.
Additionally, our research collaboration with Jazz for discovery
and preclinical development of a targeted cancer therapy on the
Ras/RAF/MAP kinase pathway continues towards a development
candidate nomination.
Likewise, our partnered programme with AstraZeneca, RXC006 /
AZD5055, a Porcupine inhibitor for the treatment of fibrotic
disease continues to progress through a Phase 1 clinical trial.
Under these agreements, we still have the opportunity to benefit
from further non-dilutive potential milestone payments in the
longer-term future of up to $755 million.
Financial Overview
Our opening cash position allowed us to continue to fund our
scientific progress towards important development milestones, as we
also continued to explore ways to strengthen our balance sheet
during the year.
The Company ended the period with a cash balance of GBP18.1
million (2022: GBP53.9 million), which was further strengthened by
the post-year end GBP14.1m (gross), GBP13.6 million (net) financing
which, taken with our existing resources, provides a cash runway
into Q3 2024. The financing was undertaken at the market price of
26p with existing institutional investors and will support our
assets through the next near-term value inflection points.
We were pleased to receive notice during the year from our two
largest shareholders, Redmile and Sofinnova, of their extension of
the term of the convertible loan notes by a year, until August
2024. As a result, the extension of these liabilities provided a
GBP1.6 million accounting gain.
Whilst no revenue milestones have been reached in the year, our
partnerships with AstraZeneca and Jazz continue to progress well
with both advancing assets into Phase 1 development.
With two programmes now in Phase 2 development, investment into
our clinical programmes increased and, as evidenced by the recent
nomination of our next development candidate, we continued to
invest in our R&D capabilities with spending of GBP34.0m (2022:
GBP34.4m). With the absence of any milestone revenue triggering
events during this year, and its impact on revenue, the Group
recorded a post tax loss of GBP33.2 million.
In early 2023, we pursued a recommended all-share business
combination with Jounce Therapeutics ("Jounce"), a US-based
clinical-stage immunotherapy company. The proposed transaction was
unable to complete following the acceptance of an unsolicited
third-party cash offer for Jounce by their Board. The expenses
relating to the transaction have been separately disclosed in the
Consolidated Statement of Income and Expenditure.
Despite inflationary pressures during the year, we have
continued to work hard to limit the effects on the Company by
pursuing stringent cash management and resource allocation
strategies, including undertaking our pipeline prioritisation
review. During the year we have managed our headcount carefully,
and as we move into 2024, have an organisation of approximately 65
employees, appropriate to execute our strategy.
We believe in the strength of our pipeline and that it provides
an attractive opportunity to investors, illustrated by the recent
financing. However, we remain cognisant of the wider macroeconomic
climate and the uncertainty that it brings, and we continue to
evaluate a number of options to secure longer-term funding for the
Company, including equity financing, partnering portfolio assets
and potential for additional milestones on existing partnerships.
The associated uncertainty, along with our judgement in relation to
the maturity of convertible loan notes, is discussed in more detail
in the basis of preparation of the Consolidated Financial
Statements.
Governance and Management
As we continue to grow into a business with multiple in-house,
clinical-stage assets the composition of our management team and
Board have evolved to support this development. To reflect our
strategic focus on the development of our ROCK portfolio, we have
augmented our management team with the creation of a programme
manager role for zelasudil, which is now held by our Head of
Non-clinical Operations, Helen McKeever. Helen has over 25 years'
experience in nonclinical and early drug development and will lead
the cross functional project team to define and drive the
scientific and clinical progress of this programme and establish
value creation across the lifecycle of the compound. Additionally,
Dr Elaine Kilgour was appointed as Head of Translational Science in
January 2023 to strengthen our expertise in this area. Elaine has
over 25 years' experience in academia and industry primarily
specialising in metabolic diseases and oncology and has quickly
become a key member of our team, shaping our scientific agenda.
Dr Jane Robertson, our Chief Medical Officer (CMO), will be
stepping down in the New Year to return to a clinical setting. Jane
will remain an adviser to the Company and from 1 January 2024, Dr.
Helen Timmis, currently VP, Senior Medical Director, will become
Interim CMO.
As a registered physician with over 16 years' experience in
industry, Helen has been an integral part of the clinical
development team for zelasudil and RXC008 since joining Redx and
will continue to drive the clinical development of these
programmes.
There were also changes at the Board level during the period.
Dr. Joseph Anderson was appointed as a non-executive director
representing Sofinnova Crossover I SLP in the place of Dr. Thomas
Burt who stepped down after three years on the Redx Board.
Additionally, we were saddened that Sarah Gordon-Wild resigned as a
non-executive director for personal reasons at the end of the
financial year.
We continue to believe that we have a strong Board with the
necessary experience and composition to drive the future strategy
and success of the Company and therefore we have elected to not
replace this non-executive position at this time.
Following these changes, the Audit, Risk and Disclosure
Committee is comprised of Peter Presland (Chair) and Rob Scott; the
Remuneration Committee of Bernhard Kirschbaum (Chair) and Peter
Presland; and the Science Committee of Bernhard Kirschbaum (Chair),
Rob Scott and Lisa Anson.
Outlook
We have refined our focus and aligned our strategy to progress
what we believe are differentiated ROCK inhibitor assets. With
Phase 2a data expected from zelasudil in the first half of 2024,
and a CTA submission for RXC008 completed to allow for the
commencement of a Phase 1 study early in 2024, we are
well-positioned to continue to develop these assets through their
clinical development plans.
We have continued to leverage our scientific capabilities and
medicinal chemistry expertise through the discovery of new, novel
drug candidates. We intend to develop these assets further,
including through partnership where appropriate, to ensure that
they can reach their fullest potential and bring new treatment
options in areas of unmet medical needs.
I would like to take this opportunity thank our Board who have
provided support and guidance to the Company throughout its
evolution and strategy refinement. The biggest asset of any
biotechnology company is its people, and we are fortunate to have
an exceptionally talented team led by senior well-respected
medicinal chemists and translational scientists. I would like to
thank all of our employees who have worked tirelessly throughout
the last year to make our significant achievements possible, and
who are fundamental to our future success.
Additionally, I would like to thank our shareholders who
continue to support the development of our novel drug candidates.
Although there remain ongoing challenges in the equity markets and
broader economic landscape, we will continue to evaluate all
available options to secure the financial resources required to
allow us to continue to pursue our ambition of creating world
leading medicines to transform patients' lives.
I believe our refined strategy and focus will help us maximise
the potential of our pipeline, and with the progress made during
the year, and the significant near-term value inflection points
expected across our entire pipeline of assets, I am excited by the
prospects of the Company in 2024 and beyond.
Lisa Anson
Chief Executive Officer
Operational Review
The Directors present this Operational Review for the year ended
30 September 2023 and cover issues not covered elsewhere in their
Strategic Report, namely: Key Performance Indicators, Financial
Review and the Principal Risks and Uncertainties.
The principal activities of the business continue to be the
discovery and development of proprietary, small molecule drugs to
address areas of high, unmet medical need.
Management Team
Lisa Anson (Chief Executive Officer), Dr Richard Armer (Chief
Scientific Officer), Peter Collum (Chief Financial Officer), Dr
James Mead (Chief Operating Officer), Dr Jane Robertson (Chief
Medical Officer) and Claire Solk (General Counsel) have continued
in their positions throughout the year. Caroline Phillips, (Senior
Vice President, Biology) and Cliff Jones (Senior Vice President,
Chemistry, DMPK and Intellectual property) joined the Executive
management team in June 2023.
Key Performance Indicators (KPIs)
The Group's KPIs include a range of financial and non-financial
measures. The Board considers pipeline progress, and in particular
progress towards the clinic, to be the main KPI, and updates about
the progress of our research programmes are included in the Chief
Executive's Report. Below are the Financial KPIs considered
pertinent to the business.
2023 2022 2021 2020
GBPm GBPm GBPm GBPm
Cash at year end 18.1 53.9 29.6 27.5
The Group continues to focus on sufficient funding to deliver
its development plan. The year end cash, together with
the GBP14.1 million (gross), (GBP13.6 million (net) raised
in November 2023 is sufficient to fund the plan into the
third quarter of 2024.
2023 2022 2021 2020
GBPm GBPm GBPm GBPm
Total operating
expenditure 34.0 34.4 27.1 14.1
(excluding reverse
merger expenses,
share-based payment
costs & exchange
gains)
Expenditure has risen in line with expectations as programmes
progress positively through clinical and preclinical stages,
which are cash intensive. Management continues to maintain
rigorous cost control, whilst seeking to prioritise resources
for scientific programmes.
2023 2022 2021 2020
GBPm GBPm GBPm GBPm
Net (decrease)
/ increase in cash
and cash equivalents (35.8) 24.3 2.0 23.8
The group continued to invest in its planned R&D activity
at budgeted levels. A further GBP14.1 million (gross) GBP13.6
million (net) was raised in November 2023, to further fund
activity.
Financial Review
Financial position
At 30 September 2023, the Group had cash resources of GBP18.1
million (2022: GBP53.9 million). Post period, in November 2023, the
Group raised GBP14.1 million (gross), GBP13.6 million (net) via a
placing of Ordinary shares, supported by existing specialist
investors, further strengthening the Group position.
Whilst there were no milestones from existing partnerships
triggered during the period, GBP4.2 million in revenue was
recognised from progress with the ongoing collaboration with Jazz
Pharmaceuticals.
This funding is sufficient to allow the Group to fund its
business plan into the third quarter of calendar year 2024, based
on currently budgeted levels of expenditure.
This cash runway and the need for further funding beyond this
leads to a material uncertainty regarding going concern, which is
discussed in detail in note 2.
Revenue
During the year, the Group continued to derive revenue from the
research collaboration with, and provision of research and
preclinical development services to, Jazz Pharmaceuticals. There
was no milestone income in the year, compared to GBP10.7 million in
2022. In accordance with IFRS 15 "Revenue from Contracts with
Customers", the funds received in advance for the collaboration
agreement with Jazz Pharmaceuticals are recognised as revenue as
the obligations under the contract are performed (being
predominantly the underlying development services). The stage of
completeness of the Jazz collaboration is assessed at each
reporting date, and revenue recognised based on the percentage of
total expected costs incurred to date. GBP4.0 million was
recognised in the year, compared to GBP6.9 million in 2022 as
revenue from a discontinued target was recognised. The expected
timing of further recognition is detailed in note 6. Revenue from
other research agreements is invoiced and recognised as the work is
undertaken.
Operating Cost management
Research and Development costs have increased from GBP28.6
million to GBP29.1 million in order to progress clinical assets.
Operating expenses continue to be tightly controlled in the context
of an expanding research organisation and programmes progressing
through more cost intensive clinical stages.
Finance costs
Finance costs remain considerable as a consequence of the
charging of a full year's "effective interest" (calculated in
valuing the lease liability and convertible loan note liability
under IFRS), on both the convertible loan notes and the lease of
our premises at Alderley Park in the current financial year.
There was no actual cash interest paid in 2023 (2022: GBPnil).
In addition, Finance Income was significantly higher in 2023
compared to previous years given the higher interest earned on cash
bank deposits.
Cash flows
Overall negative net cash flow for the year was GBP35.8 million
(2022: Positive GBP24.3 million). See KPI's for details.
Taxation
The Group has prepared these financial statements on the basis
that it will continue to be claiming Research and Development
expenditure credits rather than R&D tax credits, as a result of
the significant shareholding by Funds managed by Redmile Group LLC.
This typically leads to lower refundable amounts.
Loss
The Group made a loss of GBP33.2 million in the year (2022:
GBP18.0), as it continued to progress its scientific pipeline.
Operating costs were broadly aligned with 2022, with the additional
loss a result of lower revenue in 2023 as described above.
Consolidated Statement of Comprehensive Loss
For the year ended 30 September 2023
Year ended Year ended
Note 30 September 30 September
2023 2022
GBP'000 GBP'000
Continuing operations
Revenue 3 4,202 18,690
Research and Development expenses (29,117) (28,563)
General and Administrative
expenses (8,069) (10,229)
Reverse merger expenses 4 (2,393) -
Exchange (losses) / gains on
translation (447) 2,297
Other operating income 2,004 1,539
___________ ___________
Loss from operations (33,820) (16,266)
Finance income 1,224 187
Remeasurement gain on loan
notes 7 1,609 -
Finance costs (1,801) (1,725)
___________ __________
Loss before taxation (32,788) (17,804)
Income tax (368) (201)
___________ __________
Loss attributable to owners
of Redx Pharma Plc (33,156) (18,005)
Other comprehensive income
Items that may subsequently
be reclassified to profit or
loss
Exchange difference from translation
of foreign operations (4) 31
Total comprehensive loss for
the year attributable to owners
of Redx Pharma Plc (33,160) (17,974)
======== ========
Loss per share
From continuing operations
Basic & diluted (pence) 5 (9.9) (6.1)
Consolidated Statement of Financial Position
At 30 September 2023 Company No. 07368089
Note 2023 2022
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 1,940 2,699
Intangible assets 394 400
___________ __________
Total non-current assets 2,334 3,099
___________ __________
Current assets
Trade and other receivables 5,210 5,498
Current tax - 26
Cash and cash equivalents 18,092 53,854
___________ __________
Total current assets 23,302 59,378
___________ __________
Total assets 25,636 62,477
___________ __________
Liabilities
Current liabilities
Trade and other payables 3,756 5,958
Contract liabilities 6 844 4,893
Borrowings 7 15,731 15,731
Lease liabilities 676 623
___________ __________
Total current liabilities 21,007 27,205
Non-current liabilities
Lease liabilities 1,274 1,951
___________ __________
Total liabilities 22,281 29,156
___________ __________
Net assets 3,355 33,321
======== =======
Equity
Share capital 8 3,349 3,349
Share premium 99,501 99,501
Share-based compensation 10,751 8,199
Capital redemption reserve 1 1
Exchange translation reserve 56 60
Convertible note reserve 3,524 3,524
Retained deficit (113,827) (81,313)
___________ __________
Equity attributable to shareholders 3,355 33,321
======== ========
Consolidated Statement of Changes in Equity
For the year ended 30 September 2023
Share Share Share Capital Exchange Convertible Retained Total
capital premium based Redemption translation Note Deficit Equity
payment Reserve Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2021 2,753 66,299 4,752 1 29 3,524 (64,226) 13,132
Loss for the
year - - - - - - (18,005) (18,005)
Other
comprehensive
income - - - - 31 - - 31
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
Total
comprehensive
loss for the
year - - - - 31 - (18,005) (17,974)
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
Transactions
with owners of
the Company
Issue of
ordinary
shares 596 33,972 - - - - - 34,568
Transaction
costs
on issue of
ordinary
shares - (770) - - - - - (770)
Share based
compensation - - 4,365 - - - - 4,365
Release of
share
options
lapsed
in the year - - (918) - - - 918 -
Movement in
year 596 33,202 3,447 - 31 - (17,087) 20,189
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
At 30
September
2022 3,349 99,501 8,199 1 60 3,524 (81,313) 33,321
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
Loss for the
year - - - - - - (33,156) (33,156)
Other
comprehensive
income - - - - (4) - - (4)
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
Total
comprehensive
loss for the
year - - - - (4) - (33,156) (33,160)
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
Transactions
with owners of
the Company
Share based
compensation - - 3,194 - - - - 3,194
Release of
share
options
lapsed
in the year - - (642) - - - 642 -
Movement in
year - - 2,552 - (4) - (32,514) (29,966)
--------- --------- --------- ------------ ------------- ------------- ------------ ------------
At 30
September
2023 3,349 99,501 10,751 1 56 3,524 (113,827) 3,355
========= ========= ========= ============ ============= ============= ============ ============
Consolidated Statement of Cash Flows
For the year ended 30 September 2023
Year ended Year ended
30 September 30 September
2023 2022
GBP'000 GBP'000
Net cash flows from operating
activities
Loss for the year (33,156) (18,005)
Adjustments for:
Income tax 368 201
Finance costs 1,801 1,725
Finance income (1,224) (187)
Depreciation and amortisation 960 886
Share based compensation 3,194 4,365
Remeasurement of loan notes (1,609) -
Profit on disposal of assets - (13)
Movements in working capital
Increase/(decrease) in trade
and other receivables (1,422) 7,631
(Decrease) in trade and other
payables and provisions (6,251) (5,593)
__________ __________
Cash used in operations (37,339) (8,990)
Tax credit received 1,432 333
Interest received 1,160 187
__________ __________
Net cash used in operations (34,747) (8,470)
__________ __________
Cash flows from investing
activities
Sale of property, plant and
equipment - 21
Purchase of property, plant
and equipment (195) (262)
__________ __________
Net cash used in investing
activities (195) (241)
__________ __________
Cash flows from financing
activities
Proceeds of share issues - 34,568
Share issue costs - (770)
Payment of lease liabilities (816) (816)
__________ __________
Net cash generated by financing
activities (816) 32,982
__________ __________
Net increase in cash and cash
equivalents (35,758) 24,271
Cash and cash equivalents at
beginning of the year 53,854 29,552
Foreign exchange difference (4) 31
__________ __________
Cash and cash equivalents
at end of the year 18,092 53,854
__________ __________
Consolidated Statement of Cash Flows (Cont'd)
For the year ended 30 September 2023
Reconciliation of changes in liabilities arising from financing
activities
2023
GBP'000
IFRS 16 Lease liability
Balance b/fwd 2,574
Payment of lease liabilities (816)
Interest on lease liabilities 192
__________
Balance c/fwd (disclosed as 1,950
current and non-current lease __________
liabilities)
Convertible loan notes
Balance b/fwd 15,731
Remeasurement on change in estimated
cash flows (1,609)
Interest 1,609
___________
Balance c/fwd (disclosed as 15,731
current borrowings) ___________
Notes to the financial information
1. Basis of preparation
The Group's financial information has been prepared in
accordance with the historical cost convention and in accordance
with UK adopted International Accounting Standards and on a basis
consistent with that adopted in the previous year.
Whilst the financial information included in this Preliminary
Results Announcement has been prepared in accordance with the
recognition and measurement criteria of IFRS, this announcement
does not itself contain sufficient information to comply with
IFRS.
The Preliminary Results Announcement does not constitute the
Company's statutory accounts for the years ended 30 September 2023
and 30 September 2022, within the meaning of Section 435 of the
Companies Act 2006 but is derived from those statutory
accounts.
The Group's statutory accounts for the year ended 30 September
2022 have been filed with the Registrar of Companies, and those for
2023 will be delivered following the Company's Annual General
Meeting. Auditors have reported on the statutory accounts for 2023
and 2022. The audit report for 2023 was (i) unqualified, (ii)
highlighted material uncertainties in relation to going concern to
which the auditor drew attention by way of an emphasis of matter
paragraph, without modifying their report and (iii) did not contain
statements under Sections 498 (2) or 498 (3) of the Companies Act
2006 in relation to the financial statements. The Auditors report
for 2022 was (i) unqualified, (ii) highlighted material
uncertainties in relation to going concern to which the auditor
drew attention by way of an emphasis of matter paragraph, without
modifying their report and (iii) did not contain statements under
Sections 498 (2) or 498 (3) of the Companies Act 2006 in relation
to the financial statements.
The Company is a public limited company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange.
2. Going concern
The Board have adopted the going concern basis in preparing
these accounts after assessing the Group's cash flow forecasts and
principal risks.
At 30 September, 2023 the Group held GBP18.1 million of cash and
cash equivalents. The Group has a history of recurring losses from
operations, including a net loss of GBP33.2 million for the year
ended 30 September, 2023 and an accumulated deficit of GBP113.8
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 GBP35.8 million for the year ended 30
September, 2023. Post year-end on November 7, 2023 the Group closed
the sale of 54,074,458 Ordinary Shares, resulting in gross proceeds
of GBP14.1 million (GBP13.6 million net of transaction costs).
As part of its approval of the Group's budget for the year
ending 30 September 2024, the Board concluded that the Group holds
sufficient cash and cash equivalents to provide a cash runway into
September 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 before
or in August 2024 (see further discussion below).
In undertaking the going concern review, the Board has reviewed
the Group's cash flow forecasts to 31 December, 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 plans to
raise significant further finance within the going concern 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. 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. 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 recalled by August 2024 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 40% when compared to the share price at which
the 7 November, 2023 equity fundraising was completed, in which
both convertible loan note holders participated; as a result the
directors do not currently expect the convertible loan notes to be
recalled by August 2024.
-- the directors continue to pursue a number of options to
secure longer-term funding for the Group, including equity
financing, partnering portfolio assets and potential for additional
milestones on existing partnerships, and based on current plans and
discussions with third parties 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.
3. Revenue
2023 2022
GBP'000 GBP'000
Revenue from milestones on
scientific programmes - 10,693
Revenue from research collaboration 4,049 6,852
Revenue from research and
preclinical development services 153 1,145
---------- ----------
4,202 18,690
========== ==========
4. Reverse merger expenses
On 23 February 2023 the Group announced an 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, relating to professional fees, it
has been disclosed separately within the Consolidated Statement of
Comprehensive Loss. The proposed transaction formally lapsed on 3
April 2023 and no further expense is expected.
5. Loss per share
Basic loss per share is calculated by dividing the loss 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:
2023 2022
GBP'000 GBP'000
Loss for the period
attributable to the
owners of the Company (33,156) (18,005)
Number Number
Weighted average
number of shares
- basic and diluted 334,911,458 294,182,774
============= =============
Pence Pence
Loss per share -
basic and diluted (9.9) (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".
The Group operates a number of share option schemes which could
potentially dilute basic earnings per share in the future. In
addition, the convertible loans could result in the issuance of
110,288,887 ordinary shares that could potentially dilute basic
earnings per share on conversion.
6. Contract liabilities
2023 2022
GBP'000 GBP'000
Contract liabilities 844 4,893
844 4,893
============ ============
Reconciliation
Brought forward 4,893 4,318
Contract asset received - 7,427
Transfer to revenue (4,049) (6,852)
Carried forward 844 4,893
============ ============
Unsatisfied performance
obligations
The aggregate amount of the transaction price allocated
to the performance obligations that are unsatisfied
at the end of the reporting period was GBP0.84 million
as at 30 September 2023 (2022: GBP4.89 million)
and is expected to be recognised as revenue in future
periods as follows:
2023 2022
GBP'000 GBP'000
Within 1 year 844 3,920
In the second to fifth years - 973
844 4,893
============ ============
The contract liability relates to a single research
collaboration contract.
7. Borrowings
2023 2022
GBP'000 GBP'000
Convertible loan notes
Current 15,731 15,731
15,731 15,731
=========== ===========
On 4 August, 2020 Redx Pharma plc issued convertible loan notes
with a value of GBP22.2m. 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, at the discretion of the noteholder. 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 holders retain the right to extend
the repayment date in one year increments, up to a maximum of ten
years. The conversion rate is 1 Ordinary share for each GBP0.155 of
convertible loan note held. The convertible loan notes are secured
by a fixed and floating charge over all the assets of the
Group.
Initial measurement
In accordance with IAS 32 Financial instruments, the convertible
loan notes have been assessed as compound financial instruments
containing equity and liability components. The Group has
calculated the value of the liability component using a discount
rate for an equivalent bond without an equity component, of 8.5%.
The Group determined this rate by obtaining interest rate from
external financing sources and making certain adjustments to
reflect the terms of the instrument; specifically to adjust the
interest rate to account for the expected term of the convertible
loan notes, its value and the conditions attached to it. The value
of the conversion feature of GBP4.57 million was calculated as the
residual value of the loan after calculating the fair value of the
liability component and has been recognised as an equity component
within the Convertible note reserve in the Consolidated Statement
of Financial Position. Total transaction costs of GBP1.1 million
have been allocate between the equity and liability components. An
increase in discount rate to 9.5% would decrease the debt element
by GBP127k and a decrease to 7.5% would increase the debt element
by GBP129k.
Partial conversion
On 2 December, 2020 the Group announced that RM Special Holdings
3 LLC and Sofinnova Crossover 1 SLP would convert GBP3.33 million
and GBP1.75 million respectively of the principal amount of the
convertible loan notes into Ordinary shares. Under the terms of the
convertible loan notes, the conversion took place at 15.5p per new
Ordinary share. Accordingly, 32,806,159 new Ordinary shares were
issued. As of 30 September, 2022, an aggregate of GBP17.1 million
in principal amount was outstanding under the convertible loan
notes. This equates to 110,288,887 Ordinary shares at GBP0.155 per
share.
Extension of Maturity date
On June 27, 2023 confirmation was received from the Purchasers
of their intention to execute their initial extension option under
the terms of the instrument, the revised maturity date being 4
August 2024. As this feature was included in the original
instrument, this has been treated as a revision to the cash flows
associated with it, rather than as a modification.
The remaining gross principal of GBP17.1 million has been
discounted at the effective interest rate determined on initial
measurement, resulting in a discounted liability of GBP15.7 million
(2022: GBP15.7 million). The revised recognition of the discounted
liability resulted in a gain of GBP1.6m, which in accordance with
IFRS 9 has been recognized as income. As no actual interest rate
has been stipulated by the loan note holders, consistent with their
rights under the Agreement, effective interest will continue to be
charged up to the revised maturity date.
8. Share Capital
2023 2022
Note Numbers Numbers
Number of shares in issue
In issue at 1 October 334,911,458 275,282,205
Issued for cash - 58,070,956
Exercise of share options - 1,558,297
------------- -------------
In issue at 30 September 334,911,458 334,911,458
============= =============
GBP'000 GBP'000
Share Capital at par, fully
paid
Ordinary shares of GBP0.01
At 1 October 3,349 2,753
Issued for cash - 581
Exercise of share options - 15
------------- -------------
At 30 September 3,349 3,349
============= =============
All ordinary shares rank equally with regard to the Company's
residual assets. Holders of these shares are entitled to dividends
as declared from time to time and are entitled to one vote per
share at general meetings of the Company. All rights attached to
the Company's shares held by the Group are suspended until those
shares are reissued.
9. Related Parties
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. Transactions
between the Group and other related parties are disclosed
below:
In March 2020, as a result of the purchase of shares by RM
Special Holdings 3, LLC ("Redmile"), it became a significant
shareholder (>70%) and related party. The Group issued GBP14.5
million convertible loan notes to Redmile on 4 August 2020 on terms
summarised in note 7. Redmile further participated in the placing
of Ordinary shares in June 2022.
Under the terms of the agreement for its subscription for shares
on 20 July 2020, Sofinnova Crossover 1 SLP ("Sofinnova") appointed
a director to the Board of Redx Pharma plc. The Board believes that
this satisfies the criteria for Sofinnova to be considered a
related party. On 4 August 2020 the Group issued GBP7.6 million
convertible loan notes to Sofinnova, the terms of which can be seen
in note 7. Sofinnova also participated in the placing of Ordinary
shares in June 2022.
On 2 December, 2020 the Group announced that RM Special Holdings
3 LLC and Sofinnova Crossover 1 SLP would convert GBP3.33 million
and GBP1.75 million respectively of the principal amount of the
convertible loan notes into Ordinary shares. Under the terms of the
convertible loan notes, the conversion took place at 15.5p per new
Ordinary share. Accordingly, 32,806,159 new Ordinary shares were
issued and admitted to trading on AIM on 22 December, 2020. As of
September 30, 2022, an aggregate of GBP17.1 million in principal
amount was outstanding under the convertible loan notes. This
equates to 110,288,888 ordinary shares at GBP0.155 per share.
Following the extension of the maturity date to 4 August 2024,
the remaining gross principal of GBP17.1 million has been
discounted at the effective interest rate determined on initial
measurement, resulting in a discounted liability of GBP15.7 million
(note 7).
The interest charge in the period relates to the unwinding of
the discount at the effective interest rate on the convertible loan
balances held by Redmile and Sofinnova respectively.
2023 2022
Charges from related parties GBP'000 GBP'000
RM Special Holdings 3, LLC
- convertible loan note interest 1,081 995
Sofinnova Crossover 1 SLP -
convertible loan note interest 528 489
----------- -----------
1,609 1,484
=========== ===========
2023 2022
Amounts owed to related GBP'000 GBP'000
parties
RM Special Holdings 3,
LLC - loan note 10,284 10,284
Sofinnova Crossover 1
SLP - loan note 5,447 5,447
----------- -----------
15,731 15,731
=========== ===========
Amounts owed to/by related parties are disclosed in borrowings
and the convertible note reserve.
10. Events after the reporting period
On 18 October, 2023, the Group announced that it had
conditionally raised GBP14.1 million (gross) by way of a placing of
Ordinary shares at 26p per share. All resolutions required to
accomplish this were passed at a general meeting of shareholders on
6 November, 2032, and accordingly 54,074,458 new Ordinary shares
were issued and admitted to trading on AIM on 7 November, 2023.
11. Report and accounts
A copy of the Annual Report and Accounts will be sent to all
shareholders with notice of the Annual General Meeting shortly and
will also be available to download from the Group's website at
www.redxpharma.com in due course.
1. a registered trademark of Abraxis BioScience, LLC, a
Bristol-Myers Squibb Company
2. Clarivate, Crohn's disease disease landscape & forecast
pg 39, Published Sep 2022
3. Chan et al, 2018
4. registered trademark of Bristol-Myers Squibb Company
5. Registered trademark of Merck & Co., Inc.,
6. a trademark owned or licensed by Eli Lilly and Company, its
subsidiaries, or affiliates
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END
FR XZLLFXLLXFBQ
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