Following the good results obtained a month ago by RedHill Biopharma Ltd. (Nasdaq: RDHL); TASE: RDHL) in a trial of its product for treatment of Helicobacter pylori bacteria (the main cause of ulcers), which boosted the company's share price, the company is set for another flotation on Nasdaq on the basis of a shelf prospectus. RedHill is listed on Nasdaq through an American depositary receipt (ADR - a US security that follows a share traded on a foreign stock exchange), with a market cap of $155 million.
It is believed that RedHill hopes to raise tens of millions of dollars through its ADR offering, on top of the $32 million in cash held by the company, $12 million of which was raised only last February. The underwriters for the flotation are Nomura, Roth Capital Partners, MLV & Co., and HC Wainwright & Co. The leading shareholders in RedHill are OrbiMed Advisors LLC (9.9%) and Broadfin Capital (4.3%). The RedHill share climbed 9% last month on the trial results (it leaped 25% when they were published, and has since receded somewhat. The share dropped 8% today, probably because the offering will be at $16 a share - the same price as before the results were published.
In the trial, RedHill's product eradicated the H. pylori bacteria in 90% of the patients, compared with 70% healing in the currently accepted treatments. The planned financing round will be used mainly to pay for the company's clinical trials. The most important and expensive of these trials next year will be a repeat Phase III trial of the H. pylori product (there is little chance that the US Food and Drug Administration (FDA) will decide that the company's previous trial is enough for registration. Meetings on the matter are expected in the near future); a Phase III US trial of the company's leading product - RHB-104, an antibiotic for treating Crohn's Disease; and an RHB-104 trial in Europe.
Each of these trials costs $10-20 million, less than a Phase III trial for a completely new drug, because the trials involve drugs already recognized for other uses in different combinations. The company is also exempt from some of the requirements for proving the safety of the drug and its behavior in the patient's body.
The company has already signed one commercial agreement, and it has a number of other products in its drug development pipeline. Some of them require a very simple clinical trials process, or have already completed their clinical process, for example the product for treatment of migraine headaches - a recognized drug using a new delivery method - a fast- thin-film formulation that dissolves on the tongue, and a product for treating nausea and vomiting in cancer patients. In addition, RedHill has several products in the early stages of clinical trials, such as a product for treatment of multiple sclerosis and a product for treatment of cancer, which will later require major investments, but not in the next few months.
RedHill has previously stated its intention of signing commercialization agreements for all of its products, meaning that they will be marketed by a strategic partner, instead of the company itself. As of now, one such cooperation agreement has been signed for a relatively minor product, RHB-106, for emptying the intestine.
Published by Globes [online], Israel business news - www.globes-online.com - on July 15, 2015
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