AstraZeneca throws Redx a lifeline — in exchange for a preclinical fibrosis drug — with a promise of $17M in quick cash plus milestones
It’s not often that a deal with $17 million in near-term cash inspires a stock market rally. But for troubled UK biotech Redx, that kind of pact represents a new lease on life.
In and out of hot water with its creditors, Redx has now out-licensed a preclinical porcupine inhibitor, RXC006, to Mene Pangalos at AstraZeneca. And the deal sparked a big rally for small-cap Redx, with its shares $REDX rocketing up 238%.
For AstraZeneca, it’s a new approach to fibrosis that’s well worth a package of $360 million in milestones. The first $17 million in near-term cash comes to Redx as the pharma giant steps in with a plan to pursue diseases like idiopathic pulmonary fibrosis — intrigued that they can interfere with a disease pathway by tamping down Wnt ligand secretion.
Redx can now fund work on its Phase I/II program for its own clinical-stage porcupine inhibitor, RXC004, where investigators are looking at Wnt-driven tumors.
Redx has been in the headlines over the years due to its financial travails, wrestling with creditors over debt payments. Three years ago it sold a BTK inhibitor to Loxo for $40 million in cash — no milestones — in a deal arranged by an insolvency firm as the Liverpool council looked to get its loan money back.
That BTK inhibitor is now LOXO-305, part of Eli Lilly’s new-look cancer drug pipeline managed by Josh Bilenker and his team.
Social image: Mene Pangalos via Youtube