UK company Redx Pharma has decided it would be better off in private hands than publicly listed on the Alternative Investment Market (AIM), and has started the process of exiting the exchange.
Redx chair Dr Jane Griffiths said the decision to de-list – which will be put to shareholders for a vote later this month – was made unanimously by the company’s board. It follows a similar decision last week by drug discovery company C4X Discovery, which also said it was finding it hard to raise funds on the London Stock Exchange’s junior market.
The decisions follow a slump in new issues on the AIM during 2023 – hitting lows not seen in more than 20 years – as well as a downturn in secondary financings and low trading values.
“Despite completing some of the largest AIM capital raises for biotech companies in recent years, Redx is still liquidity constrained on AIM,” said Griffiths. “As a result, we believe our current market valuation is not reflective of our track record or future potential and is not conducive to raising the level of capital required for our growing clinical portfolio.”
That echoes comments made by C4X CEO Dr Clive Dix last week, who said: “We believe that we can potentially access a larger quantum of future funding required to accelerate our strategy as a private company.”
Both companies have also criticised the regulatory requirements associated with maintaining a stock market listing in the UK. Redx said meeting those requirements has become onerous, swallowing up “considerable cost and management time” that outweighs any benefits of being listed on the AIM.
Re-registering as a private company will “reduce…recurring administrative and adviser costs which the board believes can be better spent supporting and investing in the group’s business,” it added.
Redx’s move comes after a fertile period for the company, with five molecules delivered into clinical testing in the last five years along with four major partnering deals. Its latest – with Jazz Pharma – was worth up to $880 million and included multiple preclinical-stage KRAS inhibitor candidates for cancer.
“Although we are delisting from AIM, we continue to believe that the UK is an excellent hub for scientific discovery and drug development,” said Griffiths, adding that the company remains “committed to being part of the UK life sciences community retaining our facility based at Alderley Park.”
Shareholders are due to vote on the decision at a meeting on 19th April, with a 75% vote in favour required to push it through. C4X is due to hold its shareholder meeting on 15th April.
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