Redx Pharma

Receipt of $4m milestone for RXC006 progress

Lighthouse | 17 June 2021

Share this note

  • Redx Pharma has received a $4m milestone from AstraZeneca reflecting continued progress with RXC006. This payment is part of a potential $17m package that will accrue until RXC006 starts clinical trials. The out-licencing agreement, struck in August 2020, is on attractive terms for such an early-stage asset. Redx Pharma could be eligible for a further $360m of clinical and commercial milestones, in addition to mid-single digit royalties on net sales.
  • RXC006 is a porcupine inhibitor in development for fibrosis indications. The Wnt pathways are critical elements in maintaining adult cell homeostasis, including wound healing and repair functions. Wnt is increasingly recognised as an attractive albeit challenging drug target, with a growing interest in these pathways. A wholly-owned and unrelated porcupine programme, RXC004, is being developed by Redx Pharma in oncology; this is completing Phase I studies and is expected to start Phase II monotherapy and combination trials in H221.
  • We believe AstraZeneca will develop RXC006 initially for IPF (idiopathic pulmonary fibrosis) as the preclinical data looked particularly promising. Assuming progress is maintained, RXC006 could initiate Phase I trials during H221. This would trigger the payment of the balance of the $17m preclinical payments. If the early IPF studies are positive, we expect AstraZeneca to broaden the development programme into other significant and commercially attractive fibrosis indications.
  • The out-licensing of RXC006 was the result of Redx Pharma’s strategy to actively manage the many development opportunities that it has. This deal, together with the agreements with Jazz Pharmaceuticals (pan-RAF and Ras/Raf/MAPK inhibitors), has de-risked Redx Pharma’s early-stage pipeline yet still retains material commercial upside if successful.

Trinity Delta view: The $4m AstraZeneca milestone is an apt reminder of the momentum being generated and the quality of the investment case. Redx Pharma has an acknowledged expertise in medicinal chemistry which underpins its discovery platform and has created, in our view, an attractive, and well balanced, clinical portfolio. The two lead in-house assets, porcupine inhibitor RXC004 in oncology and ROCK2 inhibitor RXC007 for fibrosis indications, are both in the clinic and on track to progress to key proof of concept trials. The partnered assets are also progressing towards the clinic as evidenced by partner-derived revenues such as this RXC006 milestone. A solid balance sheet with £39.9m in cash resources means Redx Pharma is funded through to end-2022; a period that covers a number of important value-inflection points. Our rNPV-based valuation, based on conservative assumptions, is £350.7m, equivalent to 128p/share (86p fully diluted).


17 June 2021

Market Cap£160.2m
Primary exchangeAIM London
Company CodeREDX
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


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.