Redx raises $36M to fund Phase 2 Crohn’s disease trial

Why it matters: The financing is part of Redx’s efforts to secure the funding needed to show whether its gut-restricted drug candidate, RXC008, works. By tackling fibrosis rather than focusing on inflammation, the therapy could provide fibrostenotic Crohn’s patients with an alternative to surgical intervention.

By the numbers: Redx raised the Series A round, which it first disclosed on Aug. 14, as part of its pending merger with Skye Bioscience. Abingworth led the Series A with support from other new investors in Redx, including British Business Bank. Redmile, Redx’s current major shareholder, also contributed to the financing. 

• $125 million (€107 million): The total financing package intended to fund operations beyond Redx’s pending merger with Skye.
• $68 million (€58 million): The private placement Redx expects to close post-merger, featuring participation from the three Series A investors, plus NEXTBio Capital and 5AM Ventures. 
• 2029: The year the combined company’s cash runway will extend to following the financing. 

Big picture: Companies including AbbVie, Eli Lilly, Johnson & Johnson and Takeda sell Crohn’s medicines against a range of drug targets, but their focus on reducing inflammation leaves an unmet need for products that prevent progression of the underlying fibrosis. Redx designed RXC008 to meet that need. 

How it works: RXC008 inhibits Rho-associated coiled kinase (ROCK), a signaling pathway implicated in a wide range of diseases characterized by inflammation, fibrosis and metabolic dysregulation. A ROCK inhibitor, fasudil, was approved in Japan in 1995 and multiple drugs against the target are now available globally, but side effects including low blood pressure have limited the applications of the mechanism.

• Redx has designed RXC008 to act on fibrosis in the gastrointestinal tract and to degrade quickly in the bloodstream, limiting systemic exposure to the compound and the risk of low blood pressure. A Phase 1 trial provided clinical evidence that the compound is restricted to the gastrointestinal tract. 

Backstory: Redx agreed a similar reverse merger in 2023 with Jounce Therapeutics, only for Concentra Biosciences to hijack the deal. After the setback, Redx delisted its shares from London’s AIM exchange and continued to advance its pipeline, including by starting a Phase 1 trial of RXC008 in healthy volunteers. 

What’s next: The combined company, which will operate as Fibrx Therapeutics after the reverse merger, will be led by Redx’s management team, listed on the US Nasdaq stock exchange and focused on developing RXC008. Current Skye shareholders will own about 5% of the combined company. 

• Redx aims to report topline Phase 2 data on RXC008 in the second half of 2028, positioning it to deliver key evidence of whether the drug candidate works before needing to raise more money.