Half-year Report

RNS Number : 0559Z

Redx Pharma plc

24 May 2016

AIM: REDX

REDX PHARMA PLC

("Redx" or "Company" or "Group")

Interim Results

Redx (AIM: REDX), the drug discovery and development company, is pleased to announce its unaudited interim results for the six months ended 31 March 2016.

HIGHLIGHTS

· Continued strong progress across proprietary research programs

Oncology pipeline

- fourth development candidate selected - Porcupine inhibitor for hard-to-treat cancers, such as pancreatic, triple negative breast and head and neck cancers

- post period: in vivo proof of concept achieved in BTK program - reversible inhibitor with potential to treat leukaemia and other blood cancers - see separate announcement issued today

Anti-infectives pipeline

- proof of concept established with a lead compound which has the potential to treat gonorrhoea, one of the most common sexually transmitted infections globally

Immunology pipeline

- several projects have now been successfully initiated

- currently conducting pre-clinical efficacy studies for treatment of an immunological disease with high unmet need

· H1 financial results in line with management expectations:

- net cash at 31 March 2016: £4.4m (H1 2015: £13.8m)

- comprehensive loss of £7.1m (H1 2015: £3.2m)

· Successful share placing to raise £10m (gross) completed in April, after period end

· Outlook remains positive and the Company remains well-positioned to secure value from its assets and to further develop the business

Neil Murray, Chief Executive of Redx Pharma Plc, said:

"I am pleased to report that interim results are in line with management expectations and that Redx's innovative pipeline has made excellent progress over the period. We identified a fourth drug development candidate, a Porcupine inhibitor, which has the potential to tackle hard-to-treat cancers, such as pancreatic, triple negative breast and head and neck cancers, reaching development stage in less than two years, significantly ahead of industry averages. Our anti-infectives team also achieved a further proof of concept, with a lead which has the potential to treat drug-resistant gonorrhoea.

Today, we are delighted to announce our seventh proof of concept, a BTK reversible inhibitor that has the potential to treat leukaemia and other blood cancers.

We completed a £10m fundraise shortly after the period ended, which leaves us well-positioned to build on our pipeline progress and grow the business."

For further information, please contact:

Redx Pharma Plc	T: 0151 706 4747
Neil Murray, Chief Executive Company website: redxpharma.com
Cantor Fitzgerald Europe (Nomad & Broker)	T: 020 7894 7000
Phil Davies / Michael Reynolds
KTZ Communications	T: 020 3178 6378
Katie Tzouliadis/ Viktoria Langley/ Emma Pearson

About Redx Pharma Plc

www.redxpharma.com

Redx is focused on the discovery and development of proprietary, small molecule therapeutics to address areas of high unmet medical need, principally in cancer, infection and immunology, providing a pipeline of assets to larger and emerging companies. By improving the characteristics of existing drug classes to create highly differentiated, novel, best-in-class drugs, Redx has already established a portfolio of proprietary (patent‑protected) drug programs. Seven proof of concepts have been achieved, with relevance for respective therapies to treat MRSA, Gonorrhoea, bone tumours, skin, brain, breast, pancreatic and blood cancers.

CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT

INTRODUCTION

We are pleased to report on the progress Redx has made in the six months ended 31 March 2016.

The Group has continued to make excellent progress across its proprietary research programs and we remain very encouraged with the potential of the pharmaceutical assets we are developing. As we have previously indicated, we intend to commercialise these assets through partnerships, out-licensing or co-development at the pre-clinical stage or in early clinical phases.

In early December, we were delighted to announce that we had identified a fourth drug development candidate from our innovative pipeline. This new drug candidate, which inhibits the porcupine protein, has the potential to tackle some of the most hard-to-treat cancers, such as pancreatic, triple negative breast and head and neck cancers. Significantly, the program reached development stage from concept in less than two years and it is now progressing through IND-enabling studies, with first-in-human clinical trials expected in the first quarter of 2017.

In February, we also announced our second proof of concept from our anti-infectives pipeline, with a lead that has the potential to treat gonorrhoea, one of the most common sexually transmitted infections globally. To date, we have achieved seven proof of concepts, with these leads spanning therapies that have the potential to treat MRSA, bone tumours, skin, brain, breast, pancreatic and blood cancers. As with our Porcupine development candidate, we reached proof of concept with our anti-infective lead at accelerated rates, ahead of the industry average.

In April, we successfully completed a share placing to raise £10m gross. These new funds mean that Redx is now well-positioned to progress its promising pipeline and to continue growing the business.

The Group's financial results for the half year are in line with the Board's expectations.

PIPELINE DEVELOPMENT

Overview

Redx has a broad pipeline of pre-clinical assets focused on three therapeutic areas: cancer (cancer stem cells and tumour immunology); immunology (inflammatory disease); and infectious disease (anti-microbial resistance and viral infection). The Group's focus across all three areas is on validated disease targets where there is also high unmet medical need and limited competition.

In line with this strategy, Redx has completed a review of its portfolio aimed at ensuring that the Group's programs remain commercially relevant. Redx will continue to focus on assets that have the optimum chance of building value and delivering a commercial return within a timeframe acceptable to both the board and shareholders.

The Company's assets are proceeding encouragingly towards first-in-human clinical studies. We anticipate that the first program to enter clinic will be our Porcupine inhibitor, for cancer, in the first quarter of 2017.

Oncology Pipeline

The Oncology pipeline continued to make good progress in the period, with the nomination of our fourth drug development candidate, the Porcupine inhibitor, for treatment of pancreatic, triple negative breast and head and neck cancers, representing an exciting high point for our team. We highlight the new candidate below, together with our reversible BTK inhibitor and Smoothened ("SMO") inhibitor.

Porcupine inhibitor ("PORCN")

We believe that the commercial potential of this development program is especially compelling, given the interest in this field. The superior characteristics of the Company's compound could potentially result in a best-in-class drug.

The novel, potent small molecule Porcupine inhibitor targets the Wnt pathway, an embryonic signalling pathway that is implicated in the maintenance of cancer stem cells in multiple cancer types. These cancer stem cells are associated with tumorigenesis, metastasis, recurrence and resistance in cancer. Of particular significance is the fact that the target also has an emerging role in the field of immuno-oncology with the potential to be combined with checkpoint inhibitors.

Our PORCN compound is now progressing through IND-enabling studies towards first-in-human clinical trials, which we are targeting for the first quarter of 2017.

Bruton's Tyrosine Kinase ("BTK") inhibitor - reversible

BTK is an important kinase enzyme in the B-cell receptor ("BCR") signalling pathway and is implicated in leukaemia and other blood cancers, as well as autoimmune diseases such as rheumatoid arthritis, lupus and Sjogren's syndrome.

We are seeking to develop a best-in-class reversible inhibitor to treat Chronic Lymphocytic Leukaemia (CLL) patients who have become resistant to the only treatment currently available, Imbruvica^TM (ibrutinib), which is an irreversible BTK inhibitor.

We are therefore very pleased to report today that we have achieved in vivo proof of concept for our reversible BTK inhibitor, which has the potential to treat CLL patients who have developed a resistance to ibrutinib. We anticipate that our compounds will have an improved side effect profile compared to existing irreversible BTK inhibitors. With such a profile, we believe that our compounds offer significant commercial potential.

Skin cancer program - Smoothened inhibitor

The Smoothened ("SMO") receptor is a promising target with activation of the Hh pathway linked to tumourigenesis in several cancer types including skin, brain and blood cancer.

We are developing a SMO inhibitor as a topical treatment for Basal Cell Carcinoma, the most common skin cancer. Our development compound is continuing to make pleasing progress as we work towards a regulatory pre‑clinical data package to support initial clinical studies.

Anti-infectives

Our anti-infectives pipeline comprises antibacterial and anti-viral programs, with our antibacterial programs focused on developing compounds to combat multi-drug resistant bacteria.

Our programs continue to make very good progress and, during the period, we achieved a second proof of concept from our anti-infectives pipeline within 18 months. This lead offers the potential to treat drug-resistant gonorrhoea, now ranked an urgent threat by the US Centers for Disease Control (CDC).

Gram +ve/MRSA

We also have a unique partnership with the NHS in anti-microbial resistance, working with The Royal Liverpool and Broadgreen University Hospitals Trust on new drugs to tackle drug-resistant bacteria including Methicillin-Resistant Staphylococcus Aureus ("MRSA").

This program continues to make good progress and we anticipate being able to start working on the regulatory pre-clinical data package.

Immunology

Our immunology activities, established in May 2015, are focused on developing new therapies for disorders of the immune system. We have now initiated a number of projects, and our first candidate product is an irreversible BTK inhibitor for autoimmune diseases derived from our oncology BTK program.

We are conducting pre-clinical efficacy studies in an immunological disease that is currently poorly treated and where there is the potential to be the first BTK inhibitor.

COLLABORATIONS AND PARTNERSHIPS

We have signed six deals and collaborations to date. These are with:

- AstraZeneca for an undisclosed oncology target;

- the NHS for MRSA;

- Pierre Fabre, for skin cancer;

- the European Innovative Medicines Initiative ENABLE project (a pharma consortium led by GlaxoSmithKline) on Gram-negative microbial infection;

- National Institute of Allergy and Infectious Diseases, for influenza-related drug programs; and

- Horizon Discovery Group, for colorectal cancer.

Discussions with additional potential collaboration partners remain ongoing, with a view to securing further commercial deals for our assets either at the pre-clinical stage or in early clinical phases.

BOARD APPOINTMENTS

We were pleased to make two further appointments to Redx's Board of Directors, which strengthen both our scientific and commercial capability. As previously reported, on 1 January 2016, we were pleased to welcome Bernhard Kirschbaum as a Non-Executive Director. Dr Kirschbaum has over 25 years' experience in pharmaceutical research and drug development, predominantly at global pharmaceutical companies. Post period, in May 2016, we appointed David Lawrence as a Non-Executive Director. David has over 25 years' experience in the biotech and pharmaceutical industries and has a strong track record in strategy, business development and commercial management, including working with a number of investors, biotech start-ups and SMEs. He succeeds Derek Lindsay who is stepping down from the Board but remaining with the Company as Chief Operating Officer.

FINANCIAL REVIEW

The cash position at 31 March 2016 stood at £4.4m (31 March 2015: £13.8m). In April 2016 the Group successfully completed a placing of 28.6 million new ordinary shares at 35p, which raised £9.3m after expenses. As at 30 April 2016, the cash position stood at £12.1m.

Total other operating income was £1.5m (2015: £2.0m) and related to Regional Growth Fund grants. The total comprehensive loss for the period was in line with management expectations at £7.1m (2015: £3.2m).

RELOCATION TO ALDERLEY PARK SCIENCE CENTRE

On 13 April 2016, the Group announced that Redx Oncology Ltd would be relocating from Liverpool to Alderley Park in Cheshire where it will occupy premises on the same site Redx Anti-Infectives Ltd and Redx Immunology Ltd.

OUTLOOK

Redx has an attractive early stage pipeline of products focused on areas where there is significant market interest. We made good progress across our research programs in the first half and expect this to continue over the second half of the financial year, with a particular emphasis on driving forward our most advanced pre-clinical assets, including our Porcupine inhibitor compound towards initial clinical studies.

The Company remains well positioned to secure value from its assets, including securing further commercial partnerships, and to further develop the business.

We look forward to providing a further update on progress in due course.

Frank Armstrong	Neil Murray
Chairman	Chief Executive

Consolidated Statement of Comprehensive Income

		Unaudited	Unaudited	Audited
		Half Year to 31 March 2016	Half Year to 31 March 2015	Year to 30 September 2015
	Note	£000	£000	£000

Operating expenses		(8,015)	(5,487)	(11,471)
Share based compensation	5	(111)	(489)	(608)
Other operating income		1,484	2,017	2,648
Loss from operations		(6,642)	(3,959)	(9,431)
Gain on disposal of subsidiary undertaking	2	-	895	895
Finance costs		(136)	(198)	(348)
Finance income		34	-	59
Loss before taxation		(6,744)	(3,262)	(8,825)
Income tax	3	(390)	29	650
Loss for the period		(7,134)	(3,233)	(8,175)
Other comprehensive income, net of tax		-	-	-
Total comprehensive loss for period attributable to owners of Redx Pharma plc		(7,134)	(3,233)	(8,175)

		pence	pence	pence
Loss per share - basic and diluted	4	(11.0)	(6.3)	(14.1)

Consolidated Statement of Financial Position

	Unaudited	Unaudited	Audited
	31 March 2016	31 March 2015	30 September 2015
	£000	£000	£000
Assets
Property, plant and equipment	369	71	353
Intangible assets	309	309	309
Other receivables	767	730	750
Total non-current assets	1,445	1,110	1,412
Trade and other receivables	1,083	3,127	1,407
Cash and cash equivalents	4,394	13,756	9,436
Current tax	786	29	1,501
Total current assets	6,263	16,912	12,344
Total assets	7,708	18,022	13,756
Liabilities
Trade and other payables	5,031	3,504	4,056
Borrowings	2,000	-	-
Total current liabilities	7,031	3,504	4,056
Non-current liabilities
Non-current borrowings	-	2,000	2,000
Total liabilities	7,031	5,504	6,056
Net assets	677	12,518	7,700
Equity
Share capital	650	650	650
Share premium	13,516	13,511	13,516
Share-based compensation	733	503	622
Capital redemption reserve	1	1	1
Retained deficit	(14,223)	(2,147)	(7,089)
Equity attributable to shareholders	677	12,518	7,700

Consolidated Statement of Changes in Equity

	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	Share capital	Share premium	Share-based payment	Capital redemp'n reserve	Retained deficit	Total equity
	£000	£000	£000	£000	£000	£000
Movements by half year
As at 1 October 2014	7	12,313	152	-	(10,652)	1,820
Share issue	177	14,823	-	-	-	15,000
Exercise of share options	-	14	(138)	-	138	14
Share issue costs	-	(1,572)	-	-	-	(1,572)
Cancellation of share premium	-	(11,600)	-	-	11,600	-
Creation of capital redemption reserve	(1)	-	-	1	-	-
Bonus issue	467	(467)	-	-	-	-
Transactions with owners in their capacity as owners	643	1,198	(138)	1	11,738	13,442
Loss and total comprehensive income for the period	-	-	-	-	(3,233)	(3,233)
Share-based compensation	-	-	489	-	-	489
As at 31 March 2015	650	13,511	503	1	(2,147)	12,518
Share issue costs	-	5	-	-	-	5
Transactions with owners in their capacity as owners	-	5	-	-	-	5
Loss and total comprehensive income for the period	-	-	-	-	(4,942)	(4,942)
Share-based compensation	-	-	119	-	-	119
As at 30 September 2015	650	13,516	622	1	(7,089)	7,700
Share options lapse	-	-	(7)	-	-	(7)
Transactions with owners in their capacity as owners	-	-	(7)	-	-	(7)
Loss and total comprehensive income for the period	-	-	-	-	(7,134)	(7,134)
Share-based compensation	-	-	118	-	-	118
As at 31 March 2016	650	13,516	733	1	(14,223)	677

Consolidated Statement of Cash Flows

	Unaudited	Unaudited	Audited
	Half Year to 31 March 2016	Half Year to 31 March 2015	Year to 30 September 2015
	£000	£000	£000
Net cash flow from operating activities
Loss for the period	(7,134)	(3,233)	(8,175)
Adjustments for:
Income tax	390	(29)	(650)
Finance costs (net)	102	198	289
Gain on disposal of subsidiary undertaking	-	(895)	(895)
Depreciation and amortisation	117	73	139
Share based compensation	111	489	608
Movements in working capital
Decrease in trade and other receivables	324	321	1,194
Increase in trade and other payables	837	394	815
Decrease in items held for sale	-	21	21
Cash used in operations	(5,253)	(2,661)	(6,654)
Tax credit received	325	97	97
Interest received	19	-	19
Net cash used in operations	(4,909)	(2,564)	(6,538)
Cash flows from investing activities
Purchase of property, plant and equipment	(133)	(14)	(362)
Net cash used in investing activities	(133)	(14)	(362)
Cash flows from financing activities
Proceeds from share issue less costs	-	13,442	13,447
Interest paid	-	-	(3)
Net cash from financing activities	-	13,442	13,444
Net (decrease)/increase in cash and equivalents	(5,042)	10,864	6,544
Cash and cash equivalents brought forward	9,436	2,892	2,892
Cash and cash equivalents carried forward	4,394	13,756	9,436

Notes to the Financial Statements

1. Basis of preparation

1.01 Description of Group and approval of the interim financial statements

Redx Pharma plc (''Redx" or "the Company") is a limited liability company incorporated and domiciled in the UK. Its shares are quoted on AIM, a market operated by The London Stock Exchange. The principal activity of the Group is drug discovery, pre-clinical development and licensing.

The Group's interim financial statements are presented in pounds sterling, which is the Group's presentational currency, and all values are rounded to the nearest thousand (£000) except where indicated otherwise.

The interim financial statements have not been audited and do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006 and have been prepared in compliance with International Accounting Standard ('IAS') 34, 'Interim Financial Reporting'. Statutory accounts for the year ended 30 September 2015, prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS) and with those parts of the Companies Act 2006 applicable to entities reporting under IFRS, were approved by the Board on 19 January 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or section 498(3) of the Companies Act 2006.

The interim financial statements were approved by the Board of Directors on 23 May 2016.

1.02 Segmental information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Board of Directors and the Chief Financial Officer are together considered the chief operating decision-maker and as such are responsible for allocating resources and assessing performance of operating segments.

The Directors consider that there are no identifiable business segments that are subject to risks and returns different to the core business. The information reported to the Directors, for the purposes of resource allocation and assessment of performance is based wholly on the overall activities of the Group.

The Group has therefore determined that it has only one reportable segment.

1.03 Going concern

As part of their going concern review the Directors have followed the guidelines published by the Financial Reporting Council entitled ''Guidance on Risk Management and Internal Control and Related Financial and Business Reporting''.

The Group incurred a net loss of £7.1m during the period; however, the Directors are satisfied, based on detailed cash flow projections and after the consideration of reasonable sensitivities, that sufficient working capital is available to meet the Group's needs as they fall due for the foreseeable future and at least 12 months from the date of signing the interim financial statements. In addition, on 24 March 2016 the group announced the raising of £10m (gross) by way of a share placing of 28,571,429 new ordinary shares at a price of 35p per share.

The detailed cash flow assumptions are based on the Group's annual budget, prepared and approved by the Board, which reflects a number of key assumptions in addition to revenue forecasts, underpinned by the current pipeline.

Within the revenue forecasts, there are inherent judgements regarding the commercial and technical risk of programs. Whilst acknowledging the uncertainties in the operating environment and their resultant impact on revenues, the Directors have identified a number of opportunities to manage working capital, to mitigate against any deteriorations and uncertainties in trading.

On the basis of the above review, the Directors are confident that the Group has sufficient working capital to honour all of its obligations to creditors as and when they fall due. Accordingly, the Directors continue to adopt the going concern basis in preparing the interim financial statements.

2. Gain on disposal of subsidiary undertaking

The sale of the subsidiary Redx Crop Protection Ltd to Redag Ltd, a related party by virtue of common directors, completed on 9 October 2014, on which date control passed to the acquirer.

The gain on the disposal of subsidiary represents cash consideration of £1 and a loan of £714,000 received for the disposal of net liabilities of £181,000.

Redx Crop Protection Ltd had been classified and accounted for as assets and liabilities held for sale at 30 September 2014.

3. Income tax

	Unaudited 31 March 2016 £'000	Unaudited 31 March 2015 £'000	Audited 30 September 2015 £'000
Current income tax
UK corporation tax (R&D tax credits)	-	-	(507)
Research and Development Expenditure credit	(277)	(218)	(307)
Prior year adjustment	667	189	164

Income tax charge / (credit) per the income statement	390	(29)	(650)

The Group is in continuing discussion with HMRC regarding the impact of RGF funding on the recoverability of R&D tax credits. Whilst the directors remain confident that such credits are fully recoverable, they consider it prudent not to provide on such a basis at the current time. Amounts due under Research and Development Expenditure credit are unaffected.

4. Loss per Share

Basic loss per share is calculated by dividing the net income for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period.
In the case of diluted amounts, the denominator also includes ordinary shares that would be issued if any dilutive potential ordinary shares were issued following conversion of loans or exercise of share options.
The basic and diluted calculations are based on the following:
	Unaudited	Unaudited	Audited
	Half Year to 31 March 2016	Half Year to 31 March 2015	Year to 30 September 2015
	£000	£000	£000
Loss for the period attributable to the owners of the Company	(7,134)	(3,233)	(8,175)
	Number	Number	Number
Weighted average number of shares - basic and diluted	64,981,209	51,024,477	58,021,962
	Pence	Pence	Pence
Loss per share - basic and diluted	(11.0)	(6.3)	(14.1)
The loss and the weighted average number of shares used for calculating the diluted loss per share are identical to those for the basic loss per share. This is because the outstanding share options would have the effect of reducing the loss per share and would therefore not be dilutive under IAS 33 Earnings per Share.

5. Share-based compensation

Share options have been issued to certain directors and staff during the period, and the charge arising is shown below. The fair value of the options granted has been calculated using a Black‑Scholes model.
	Unaudited	Unaudited	Audited
	Half Year to 31 March 2016	Half Year to 31 March 2015	Year to 30 September 2015
	Number	Number	Number
Options granted and vested in period	-	1,465,525	1,581,075
Options cancelled in period	(90,000)	-	(90,800)
Options granted and vesting in future periods	1,145,350	1,360,250	1,244,700
	1,055,350	2,825,775	2,734,975
	£000	£000	£000
Charge to Statement of Comprehensive Income in period	111	489	608

Assumptions used were an option life of 5 years, a risk free rate of 2% and no dividend yield. Other inputs were: Volatility 40% Share price at date of grant in a range between 41.5p and 85p Weighted average exercise price of 60p Weighted average fair value of each option of 32p

6. Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and other related parties are disclosed below:-

Trading transactions

The Group has purchased services in the normal course of business from the following companies related to individuals who are or were Directors of the Group:

Intelia Consulting Ltd - owned by P. Jackson.

Acceleris Capital Ltd - of which N. Molyneux is a Director

Norman Molyneux Consultancy Ltd - owned by N. Molyneux

Dr Frank M Armstrong Consulting Ltd - owned by F. Armstrong

The Group has provided services in the normal course of business to the following companies related to individuals who are or were Directors of the Group:

Redag Crop Protection Ltd - of which N. Molyneux is a Director. A loan has also been granted as part of the sale of this company.

The Group has purchased arms length administration services from Mrs. J. Murray, who is the wife of N. Murray.

The Group has purchased other services, and has paid deal fees and commissions, in connection with external fundraising from Acceleris Capital Ltd. These are also set out below, and were charged to the share premium account.

The amounts outstanding are unsecured.

The Group has a loan of £767,000 due from Redx Crop Protection Ltd. N. Molyneux, N. Murray, D. Lindsay, P. Jackson and P. McPartland are all shareholders in Redag Crop Protection Ltd, that company's parent undertaking.

6. Related party transactions (cont'd)

Purchases from/(charges to) related parties	Unaudited Half year to 31 March 2016 £'000	Unaudited Half year to 31 March 2015 £'000	Audited Year to 30 September 2015 £'000

Intelia Consulting Ltd	-	40	84
Redag Crop Protection Ltd	(69)	(30)	(91)
Acceleris Capital Ltd	45	35	59
Acceleris Capital Ltd (fundraising items)	-	210	295
Norman Molyneux Consultancy Ltd	10	-	18
Dr Frank M Armstrong Consulting Ltd	3	14	32
Mrs J Murray	12	9	18
	_________	__________	__________
	1	278	415
	_________	__________	__________

Amounts owed to/(by) related parties	Unaudited 31 March 2016 £'000	Unaudited 31 March 2015 £'000	Audited 30 September 2015 £'000

Intelia Consulting Ltd	-	4	25
Redag Crop Protection Ltd	(34)	(21)	(21)
Redag Crop Protection Ltd - loan	(767)	(730)	(750)
Acceleris Capital Ltd	6	7	3
Norman Molyneux Consultancy Ltd	10	-	6
Dr Frank M Armstrong Consulting Ltd	-	-	9
Mrs J Murray	2	-	-
	__________	__________	________
	(783)	(740)	(728)
	__________	__________	________

7. Events after the reporting period

On 24 March 2016 the group announced the raising of £10m (gross) by way of a share placing of 28,571,429 new ordinary shares at a price of 35p per share. These shares were issued as follows:-

6,180,197 ordinary shares on 4 April 2016

285,714 ordinary shares on 14 April 2016

22,105,518 ordinary shares on 15 April 2016

INDEPENDENT REVIEW REPORT TO REDX PHARMA PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 31 March 2016 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related explanatory Notes 1 to 7. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The interim financial report, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing and presenting the interim financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 31 March 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union, and the AIM Rules of the London Stock Exchange.

RSM UK Audit LLP

Chartered Accountants

14^th Floor, 20 Chapel Street

Liverpool

L3 9AG

23 May 2016

FURTHER INFORMATION FOR SHAREHOLDERS

AIM:	REDX
Company number:	07368089
Investor website:	http://redxpharma.com/investors.html
Registered office:	Floor 9, Lowry House, 17 Marble Street, Manchester M2 3AW
Directors:	Frank Armstrong (Non-Executive Chairman)
	Neil Murray (CEO)
	Philip Tottey (CFO)
	Peter Jackson (Non-Executive Director)
	Norman Molyneux (Non-Executive Director)
	Peter McPartland (Non-Executive Director)
	Bernhard Kirschbaum (Non-Executive Director)
	David Lawrence (Non-Executive Director)
Company Secretary:	Simon Thorn