Troubled Redx Pharma set to resume trading – but CEO Neil Murray departs
Biotech firm was forced into administration after Liverpool City Council demanded repayment of a £2m loan and is now expected back on the Alternative Investment Market in days. Tony McDonough reports
Drug development firm Redx Pharma is set to return to the stock market months after it collapsed amid a dispute with Liverpool City Council over a £2m unpaid loan.
Redx, which last year relocated from Liverpool city centre to Cheshire, exited administration on Friday after undergoing a significant restructuring, including job losses.
And it will resume trading on the Alternative Investment Market (AIM) without chief executive Neil Murray, one of the founders of the business, who has now left Redx.
Chairman Iain Ross is now overseeing operations while the search for a new CEO goes on.
A report in the Sunday Times said the company would resume trading on AIM on Monday. However, one source told YBNews that it may take a bit longer and that a further statement would be made on Monday.
Mr Ross was reported to have said that Redx needed to “get back credibility” with shareholders, adding: “There is a credibility gap. We need to fill that.”
The council pushed the firm, which last year relocated from Liverpool city centre to Cheshire, into administration in May over its failure to repay a £2m loan.
The authority loaned Redx the money in 2012 to support its expansion in the city. It later offered a two-year repayment extension but claimed in May the company had made no effort to repay.
Liverpool Mayor Joe Anderson said he had a “duty” to protect public money.
The move angered directors of the firm which has been developing lifesaving inhibitor treatments for pancreatic, gastric and biliary cancer.
Administrators FRP Advisory said shortly after the administration that it would “seek to realise assets in the interests of creditors”.
It has since the secured the sale of a pre-clinical cancer treatment to US-based biotech Loxo Oncology for £30m. This will allow Redx to pay its creditors, including Liverpool Council, and keep its drug development operations funded until early 2019.
Small biotech firms such as Redx require a significant amount of capital as developing new drugs is an expensive and time-consuming process which can often hit dead-ends.
However, the successful development of a new drug can be extremely lucrative so there are a number of specialist investors who are willing to take a risk.