Redx Pharma swings to a loss following 'seminal' year

A year after clambering out of administration, drug discovery and development outfit Redx Pharma swung to a loss but remains confident of making progress with a drug pipeline refocused on cancer and fibrosis.

The AIM-quoted company's efforts to keep operating saw the headcount slashed from 131 to 51 as the cost base was cut by a third to £10.6m, but redundancy costs of £800,000 for the year ended 30 September in a total loss of £8.8m. The previous year the company turned in a rare profit of £1.5m after selling its BTK inhibitor drug development to Loxo Oncology for $40m.

Still focused on drug discovery and development, revenues were just £100,000, but while cash balances contracted by more than two thirds, there was still £6.5m left at year-end.

After a "seminal" year, Redx assured investors it was on track to recommence a clinical trial of cancer treatment candidate RXC004, at a significantly lower dose, in the first half of 2019, which would generate headline results in mid-2020. RXC004 is an orally bioavailable inhibitor of the 'porcupine' enzyme, which plays a key role in immune resistance to treatment with immune-oncology agents.

In fibrosis, the main aim is to take what is felt to be a promising anti-fibrotic portfolio into clinic by 2020, with 2019 expected to see development candidates selected to target treatment of idiopathic pulmonary fibrosis, liver fibrosis and Crohn's disease.

Chairman Iain Ross, who was joined on the board by Lisa Anson as chief executive in June, said: "This set of results confirms that Redx is operationally, a stronger and leaner company led by an ambitious new management team, with a clear strategic direction."

Separately, Redx announced it had appointed Dr James Mead to its board to take up the role of chief financial officer.

Mead will join Redx on 1 February 2019 after a 16-year career at AstraZeneca, replacing interim CFO Dominic Jackson.

As of 0900 GMT, Redx shares had slumped 5.15% to 6.26p.