Redx Pharma

All that Jazz: $3m milestone boosts cash and confidence

Update | 7 September 2021

Share this note

The initiation of IND-enabling studies for Jazz Pharmaceutical’s pan-RAF inhibitor JZP815 has triggered a $3m milestone payment to Redx Pharma. This milestone provides external confirmation that this novel programme – one of Redx’s three partnership deals – continues to advance towards the clinic with the potential of earning future milestones, further solidifying Redx’s financial resources and supporting increased R&D investment in key assets through to end-2022. This cash runway covers several important value inflection points, including Phase II data for RXC004 its lead in-house oncology programme, and the start of Phase II trials for RXC007 in fibrosis. Ahead of further clinical updates, our rNPV-based valuation is £350.7m, equivalent to 128p/share (86p fully diluted).

Year-end: September 30201920202021E2022E
Revenues (£m)3.1 5.710.410.7
Adj. PBT (£m)(7.5) (9.5)(19.9)(26.2)
Net Income (£m)(4.3) (9.2)(20.5)(26.8)
Adj. EPS (p)(4.0) (5.6)(7.7)(9.4)
Cash (£m)(3.7) 27.531.89.9
EBITDA (£m)(6.2) (7.5)(20.5)(26.7)
Source: Trinity Delta Note: Adjusted numbers exclude share-based payments and exceptionals.
  • Start of IND-enabling studies triggers first milestone JZP815 is a preclinical Pan-RAF inhibitor sold to Jazz Pharmaceuticals in July 2019, in a deal that could see Redx receive up to $203m in development, regulatory, and commercial milestones, plus royalties on net sales. FDA acceptance of the IND (investigational new drug) application will trigger the next milestone. Under a separate collaboration contract, Jazz has funded research and preclinical work carried out by Redx to advance JZP815 to this stage, and this will continue to completion of IND-enabling studies.
  • JZP815 is a potential treatment for RAF-driven tumours  JZP815 is a novel chemical entity that has been designed using Redx’s acknowledged medicinal chemistry expertise to overcome resistance mechanisms associated with use of approved B-RAF selective drugs. These include treatment-emergent resistance (eg with Zelboraf use in melanoma) and tumours insensitive to B-RAF selective drugs due to mutations in other RAF-family kinases. Around one-third of cancers involve mutations that result in uncontrolled signalling in the RAS-RAF-MAPK pathway.
  • Looking through the keyhole Recent milestones from Jazz and AstraZeneca (June 2021 Lighthouse) confirm progress under the respective preclinical out-licencing deals. However, it is the continued progress of the innovative clinical stage in-house programmes, RXC004 (porcupine inhibitor for genetically selected solid tumours) and RXC007 (ROCK2 inhibitor for fibrosis), that should, if successful, transform the business over the medium term. Presentation of RXC004 Phase I monotherapy data at ESMO (17-21 September), and the Virtual R&D Day on 11 October, should provide additional insights on the status and promise of these assets.
  • rNPV valuation of £350.7m (128p/share)  We maintain our rNPV-based SOTP valuation of £350.7m, or 128p/share (86p fully diluted), based on conservative assumptions, ahead of a number of upcoming pipeline catalysts.


7 September 2021

Market Cap£218.5m
Enterprise Value£186.7m
Shares in issue274.8m
12 month range46.98-93.70p
Free float11.0%
Primary exchangeAIM London
Other exchangesN/A
Company codesREDX
Corporate clientYes

Company description

Redx Pharma specialises in the discovery and early clinical development of small molecule therapeutics, with an emphasis on oncology and fibrotic disease. Typically, these are progressed through proof-of-concept studies and then partnered for further development. The strategy has been validated by several collaborations.


Lala Gregorek
+44 (0) 20 3637 5043

Franc Gregori
+44 (0) 20 3637 5041

Exhibit 1: Summary of financials
Source: Company, Trinity Delta Note: Redmile/Sofinnova Convertible Loan Note has August 2023 conversion date, with a 15.5p conversion price, equating to a potential 96m of new shares.



Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publicly available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.

Copyright 2021 Trinity Delta Research Limited. All rights reserved.