Human trials on seriously ill patients for the firm’s lifesaving inhibitor treatments for pancreatic, gastric and biliary cancer are now in doubt following the latest development. Tony McDonough reports
Angry directors at cancer drug developer Redx Pharma have hit out at Liverpool City Council after the authority pushed the company into administration over a £2m debt.
As administrators at FRP Advisory said they were seeking to sell the assets of the stock market-listed company, which last year relocated from Liverpool city centre to Cheshire, Redx was insisting it had tried to reach an agreement with the council.
It has been developing lifesaving inhibitor treatments for pancreatic, gastric and biliary cancer at its new base in Alderley Edge with human trials on seriously ill patients due to start.
The city council provided a three-year investment loan of £2m to Redx in 2012 to support its business expansion plans in the city.
Despite the council agreeing to extend the repayment deadline by two years it said the firm has not made any repayment of any size during this period.
Liverpool Mayor Joe Anderson said the loan had matured on March 31, claiming there was no contact from the company. He added he had a “duty” to protect taxpayer’s cash.
But in a strongly-worded statement on Wednesday evening Redx hit back insisting it had been “actively seeking to negotiate directly with LCC” and secure finance to repay the loan as quickly as possible.
After suspending the trading of its shares on the Alternative Investment Market, the company said: “The company offered LCC an immediate payment of £1m in return for a short grace period in which to repay the outstanding amount. This offer was rejected.”
Redx chairman Iain Ross added: “The timing of this action by LCC and its advisers FRP is extremely unfortunate and quite baffling considering our efforts to have face-to-face discussions, including earlier today, the immediate offer of a payment plan and our latest proposal to make an immediate £1m payment in return for a short grace period.
“The company, which now comprises 84 employees, has two incredibly important state-of-the-art cancer programmes, which will shortly commence clinical development in seriously ill patients and both these assets are attracting significant partnering interest from a number of large pharmaceutical companies.
“Despite this and our assurances to resolve the matter quickly, LCC has refused to meet with me or to have any direct discussion.”
Redx, run by chief executive Dr Neil Murray, last week reported widening pre-tax losses of £11m for the six months to the end of March after its operating costs went up. This was up from losses of £6.7m for the same period last year.
It underwent a restructure earlier this year and said it expects to make cost savings of £4.2m. It also said it was cutting 86 jobs.
Mayor Anderson added: “This is a highly regrettable situation but Redx have been given more than two years to put their house in order and establish a way to repay this investment loan.
“Even at the 11th hour the city council was willing to work on a repayment schedule but it is now clear Redx has no intention to work with us in any meaningful way.
“This investment loan was given in good faith and we have a duty to the public to ensure their money, especially during such financial difficulties, is protected.”
FRP Advisory confirmed it had been appointed as administrator of both Redx and a subsidiary, Redx Oncology.
And in a statement to YBnews, it said: “The administrators are considering options for the group in line with their statutory duties and in the interests of creditors.
“The group’s business and assets include a number of specialist oncology drugs at various stages of development, together with related intellectual property, and the administrators will be seeking to realise the assets in the interests of creditors.
“Interested parties in the Group’s business and assets should make early contact.”