Redx Pharma Plc (LON:RDX) is expected to exit administration after selling its Bruton’s tyrosine kinase (BTK) inhibitor technology and drug development programme for US$40mln.
The deal was struck on Friday with NASDAQ-listed Loxo Oncology Inc (NASDAQ:LOXO).
READ: Redx Pharma gets UK go-ahead for first clinical trial of cancer treatment
The company was developing a treatment of leukaemia and Redx’s BTK was to be one of the second-generation of compounds with fewer side-effects than the market leader Imbruvica (often referred to as Ibrutinib).
Importantly, the company’s drug was targeted at overcoming resistance that patients have developed to the current gold standard treatment.
The transaction, which could also see Redx relisted on AIM, follows a rocky period for the life sciences group.
Its shares were suspended in May after it entered administration when Liverpool Council called in a £2mln loan.
Jason Baker, joint administrator of the company, said the sale of part of Redx portfolio was represented a “significant step forward” for business and its rescue as a going concern.
“Today's unconditional agreement is for the realisation 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 explained.
“The administrators anticipate that, upon their review and approval of the management's final business plan, the company will be set to exit administration.
“Upon exit from administration the directors of the company will be in a position to request the lifting of the suspension of the company's shares from trading on AIM.
“Until the exit from administration we shall continue with the discharge of our statutory duties as administrators in the interests of all creditors."
A longstop date of 12 weeks from the date of the Sale Agreement has been set, during which period management will be expected to finalised a business plan.
After this been reviewed and approved, the relevant forms will be deposited at the Companies Court and Companies House.
"Once this step has occurred, the companies will exit administration and return to the control of the management," said today's statement.
-- adds detail --