In another blow to the London Stock Exchange, Cheshire-based Redx Pharma announced it plans to de-list from AIM and re-register as a private limited company.

Redx chair Jane Griffiths said the Alderley Park clinical-stage biotechnology company is “liquidity constrained” on AIM.

She said the firm’s current stock market valuation “is not reflective” of its track record.

Griffiths said that as a private company Redx can “access a broader universe of specialty investors and, accordingly, a larger quantum of future funding required to execute our strategy and maximise our value in the interests of all our shareholders.”

However, Redx added that it “will continue to evaluate the optimal corporate structure to ensure its long-term success, which could include listing on an alternative exchange at a future date, should this provide appropriate access to capital and liquidity to support the company’s strategy.”

Redx Pharma’s biggest shareholder has been San Francisco investment firm Redmile Group LLC with a 71.18% stake.

To proceed with its plan, Redx requires the approval of not less than 75% of the votes cast by shareholders at a general meeting to be held on April 19, 2024.

In a stock exchange statement, Griffiths said: “Following an extensive review, the board has unanimously concluded that it is in the best interests of the company and our shareholders to delist from AIM and re-register as a private limited company.

“Redx has a strong track record: over the last five years we have delivered six molecules that are in the clinic and established four major partnering deals, validating our scientific and partnering capabilities.

“Despite completing some of the largest AIM capital raises for biotech companies in recent years, Redx is still liquidity constrained on AIM.

“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.

“The board believes that as a private company we can access a broader universe of specialty investors and, accordingly, a larger quantum of future funding required to execute our strategy and maximise our value in the interests of all our shareholders.

“Although we are delisting from AIM, we continue to believe that the UK is an excellent hub for scientific discovery and drug development and remain committed to being part of the UK life sciences community retaining our facility based at Alderley Park.”

The company added: “The board of directors of the company has extensively reviewed and evaluated the benefits and drawbacks for the company and its shareholders in retaining the admission to trading of the ordinary shares on AIM.

“The board has taken into consideration numerous factors, both positive and negative, and considered the interests of all shareholders in reaching its decision.

“These factors include the limited liquidity in the ordinary shares and share price volatility, access to appropriate finance, less corporate and strategic flexibility and the costs and regulatory burden of maintaining a public listing being disproportionate to the benefits of the company’s continued admission to trading on AIM.

“Following this review, the board has concluded that the continued admission to trading of the ordinary shares on AIM is not appropriate and, accordingly, the cancellation and re-registration are in the best interests of the company and shareholders as a whole …

“The company remains committed to the UK life sciences industry and intends to retain its head office and primary research facility following the cancellation and re-registration at its current location in Alderley Park.

“Following the cancellation and re-registration, the company will continue to evaluate the optimal corporate structure to ensure its long-term success, which could include listing on an alternative exchange at a future date, should this provide appropriate access to capital and liquidity to support the company’s strategy.”

 

To be passed, the resolution to approve the Cancellation requires, pursuant to Rule 41 of the AIM Rules, the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting. The resolution to approve the Re-registration and the adoption of New Articles also requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting.

 

The Company is making arrangements for a Matched Bargain Facility to assist Shareholders to trade in the Ordinary Shares to be put in place from the date of the Cancellation, if the Resolutions are passed. The Matched Bargain Facility will be provided by J P Jenkins. J P Jenkins is an appointed representative of Prosper Capital LLP, which is authorised and regulated by the FCA.