Redx Pharma PLC (LON:REDX) has said it is raising US$30mln ostensibly via the issue of convertible loan notes.
Funds Redmile Group and Sofinnova Partners are putting up US$19mln and US$10mln respectively. The remainder is coming from a direct subscription of shares by Sofinnova.
The fresh injection of cash will be used to repay US$6.1mln of short-term debt, and, perhaps more importantly, to take its oncology and fibrosis drugs to “key inflection points”.
In the case of lead asset, cancer candidate RXC004, this means progressing it through a phase I clinical trial.
The funds infusion provides a “cash runway” to the third quarter of next year, RedX said.
"We have continued to make significant progress in delivering our strategy of discovering and developing novel drugs with the potential to transform the treatment of cancer and fibrosis,” added chief executive Lisa Anson.
“This financing will markedly strengthen the group's balance sheet and enable us to progress our exciting pipeline of drug development projects.
“We have also gained the support of two established specialist healthcare and life sciences investors, Redmile Group and Sofinnova Partners, who will be instrumental in assisting the company in raising further funds and executing our business plan to key value inflection points."
In a separate announcement, RedX unveiled its interim results to March 31, 2020, a period in which it made significant clinical progress.
In the update, it said safety and tolerability data from the phase I trial of its porcupine inhibitor, RXC004, should be available this year despite the disruption caused by the coronavirus. This would allow RedX to take the drug into phase II early next year.
Its second fibrosis candidate, RXC007, is expected to enter the clinic next year, investors were told.
RedX ended the six months to March 31 with cash US$2.3mln and a loss from operations of US$4.4mln.