Last March, biotech Redx Pharma (REDX) tapped investors for an extra £10m to help fund its ongoing drug discovery programme. Given that the company had only around half that amount left on the balance sheet six months later, it's been forced to ask for a further £12m to top up the coffers.
Investors will be keen to know why the group is burning through its money so quickly. Reasons include higher staff costs, more research in the immunology field, and the progress of some programmes into more expensive pre-clinical stages of development. To that end, Redx is refocusing its business on two key projects in oncology and immunology, namely its Porcupine and BTK inhibitors. The first could be used in combination with other immuno-oncology products to help treat pancreatic, biliary and gastric cancers, while the latter could be used to treat chronic lymphocytic leukaemia patients.
For now, the group's anti-bacterial assets will only be developed in collaboration with external partners so that the group can dedicate internal resources to the aforementioned projects. Staff numbers will also be cut by around 60 per cent to help cut costs.
REDX PHARMA (REDX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 33p | MARKET VALUE: | £42m | |
| TOUCH: | 32-33p | 12-MONTH HIGH: | 67p | LOW: 25p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 1.4p | NET CASH: | £5.8m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014* | nil | -4.3 | -7.6 | nil |
| 2015 | nil | -8.8 | -14.1 | nil |
| 2016 | nil | -15.4 | -19.8 | nil |
| % change | - | - | - | - |
Ex-div: na Payment: na *Pre-IPO figures | ||||
