$40M cancer deal gets Redx out of the red
- Stamford biopharma Loxo Oncology has signed a deal to snap up a cancer program from troubled U.K. startup Redx Pharma, which is currently in administration.
- Loxo gets full acquisition of Redx's Bruton's tyrosine kinase (BTK) program for $40 million. There will be no further payments, with no requirements for milestones or royalties, and the deal should get Redx out of administration and allow it to relist on AIM, a London stock exchange.
- The reversible BTK inhibitors have potential in chronic lymphocytic leukemia (CLL) resistant to Imbruvica (ibrutinib), and clinical trials are expected to begin in 2018.
In a move that Redx Pharma Chairman Iain Ross described as "baffling" to UK local paper The Liverpool Echo, the Liverpool council called in administrators to demand repayment of a three year £2 million ($2.6 million) loan.
The council lent the money in 2012 to help the Redx Oncology subsidiary expand in Liverpool. The loan was extended for a year in 2014, and a further 2 years in 2015, finally becoming due on March 31, 2017.
However, Redx Pharma had the opportunity to move the oncology subsidiary to the BioHub at AstraZeneca's old site at Alderley Edge, where its other two subsidiaries, Redx Anti-Infectives and Redx Immunology, were already located, and moved out of Liverpool in 2016.
The council accused Redx of making no effort to repay the loan. In turn, Ross claimed that the council and its advisors FRP Advisory had rejected its offer of £1 million paid immediately with a short grace period to pay the remaining amount. The loan, which had a 12% interest rate, is now valued at around £3.5 million.
The sale of Redx's BTK inhibitor program to Loxo Oncology, made by the joint administrators after discussion with the company, could see Redx exiting administration and being relisted on AIM, according to Jason Barker, joint administrator of the company.
"We are pleased to have taken a significant step forwards in line with our strategy towards the rescue of the companies as going concerns. Today's unconditional agreement is for the realization of certain of the group's intellectual property assets, the proceeds from which will allow for the creditors of the companies to be paid in full and provide working capital for the group's continuing business, thus restoring the companies to solvency," he said in a statement.
Redx Oncology retains a number of programs in oncology. Its lead product, RXC004, an oral, small molecule Porcupine inhibitor in development both as a monotherapy and in combination with checkpoint inhibitors for difficult to treat cancers, received approval from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) to begin a Phase 1 trials.
- Redx Pharma Statement
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