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REDX S DX SECU CU CURE RE RES PS1PS15MFROM AIM; However, near neighbour Evgen Pharma is forced to withdraw its flotation plans. Bill Gleeson reports.

EFFORTS by two Merseyside biotechnology rms to raise tens of millions of pounds of fresh capital on the stockmarket to fund new drugs to treat cancer and other diseases have resulted in two very dierent outcomes.

Daulby Street-based Redx Pharma has succeeded in raising PS15m through placing new shares on the London Stock Exchange's (LSE) Alternative Investment Market (AIM). A further PS5m is expected to follow later this year.

However, near neighbour Evgen E Pharma, based at Liverpool Science Park on Mount Pleasant, has shelved plans to raise up to PS20m on AIM after potential investors said they wanted to see more clinical trials data rst. [euro]e rm may return to the public markets in a year or two.

Market conditions for new otations are proving more dicult this year compared to last and both rms found raising the new cash tough going. Evgen had hoped to E complete its deal before Christmas, while Redx had hoped to be trading on the market before the end of last month.

While Redx has not hit its original target date for a listing on AIM, it will, nevertheless, announce the completion of its funding deal today with trading in the shares expected to commence tomorrow morning.

Redx is using advances in gene science to develop new personalised medicines to target cancer and infectious diseases and will be using its new funds to develop a third subsidiary that will research immunology-related treatments. It has also clinched a number of major collaboration contracts, including from the NHS and AstraZeneca, which bode well for the future. [euro]e AstraZeneca contract is potentially worth PS300m over 20-years if Redx's research programme hits milestones and other targets. [euro]is cancer-related project is one of 13 research programmes currently being undertaken by Redx. [euro]e company expects to achieve turnover of around PS8m next year.

Evgen is currently E carrying out clinical trials on a new plantderived cancer drug called Sulforadex. While the compound Dr Jimmy Muchechetere | | has been a long-established anti-cancer agent, Evgen claims it E has solved the problem of its molecular instability.

Evgen originally said it would E complete its listing last December. Ocial documents led on the LSE's website this week showed March 31 as an amended target date, but the ECHO can reveal that plan has now been shelved.

A spokesman for Evgen said: "We E have met a number of potential investors since announcing our planned initial public oering (IPO) and, in summary, their feedback was positive but some would like to see further clinical data.

"It is our intention to proceed with a private funding round to produce this data, and then to move ahead with the IPO. We are making considerable progress with our clinical development work, and remain excited by the potential of Sulforadex in both cancer and neurological conditions."

Redx's shares are being marketed to City investors by Liverpool-based Shore Capital.

Raising new cash, whether from public markets or private investors, will be crucial to both rms' prospects. To date, Redx has received more than PS10m in Regional Growth Fund investment and PS13m in equity investment from private investors, but it employs around 100 staand its salary bill has eaten into that money. Evgen has also E been supported by public cash in the form of an investment from the European Union-funded North West Fund for Biomedical.

Redx chief executive Neil Murray told ECHO Business: "We see this as a key next step in the growth of the business, giving us access to capital and protability going forward.

"It's a very strong validation of everything we have been doing over the last four years."

" One City analyst, who specialises in researching the biotechnology sector, told the ECHO that market conditions for biotechnologyotations are reasonably favourable at the moment.

Dr Jimmy Muchechetere, a research analyst at Investec Wealth & Investment, said: "Market conditions are rather favourable for smaller biotechs after a busy 2014 for mergers and acquistions and IPOs.

"[euro]e market has recognised the fundamentals of the pharmaceutical sector and companies with dierentiated products that address un-met medical needs get rewarded with deals, collaborations or other value-realising mechanisms.

"Biotech pipelines go through cycles of high to low productivity. [euro]e sequencing of the human genome coupled with computing power that has grown in leaps and bounds has seen an exponential increase in the understanding of disease processes. [euro]is has resulted in an explosion of new targets for treatment, engineering of missing or decient proteins and even audacious procedures such as the replacement of mitochondrial DNA, a case that was recently in the Supreme Courts.

"As a result of clear fundamental improvements underpinning the sector and a more accommodative regulatory environment, new drug approvals have been at multidecade highs. As long as these fundamentals remain in place, returns should follow through.

"While we cannot comment on any specic upcoming IPOs, our sense is that the IPO market has had a slow start this year generally. Last year there were many more by end of the rst quarter."

Life sciences are key to region's future LIFE sciences firms like Redx and Evgen have long been identified as a key source of economic growth for Merseyside in the coming years.

The sector forms. part of the region's knowledge economy, one of the four growth areas targeted by the Liverpool City Region Local Enterprise Partnership.

The growth plan identifies the city's universities, which are strong in the life sciences, as a possible rich vein of the sorts of discoveries and intellectual property that could be commercially exploited and contribute to future local economic development, with hundreds, perhaps even thousands more well paid scientists working in the city.
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Title Annotation:Features
Publication:Liverpool Echo (Liverpool, England)
Date:Mar 26, 2015
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