RedHill Biopharma Strengthens Cash Balance, Settles Obligations and Removes Talicia® Lien

Rhea-AI Summary

RedHill Biopharma (Nasdaq: RDHL) has announced a significant financial restructuring through a Global Termination Agreement with Movantik Acquisition Co., Valinor Pharma, , and HCR Redhill SPV, This agreement has resulted in:

1. A $9.9 million cash influx
2. Full control over an additional $0.74 million in a restricted account
3. An increase of $12.2 million in liabilities
4. A net balance sheet reduction of $2.3 million
5. Removal of the existing lien against Talicia®
6. Restoration of control over cash collections to RedHill

This restructuring aims to strengthen RedHill's cash position, enhance cash management, and allow the company to focus on R&D and commercial activities for future growth.

Positive

• Received $9.9 million in cash
• Gained control over $0.74 million in a restricted account
• Net balance sheet reduction of $2.3 million
• Removal of lien against Talicia®
• Regained control over cash collections
• Elimination of encumbrances related to previous Movantik divestment and Credit Agreements

Negative

• Increase of $12.2 million in liabilities

Financial Analyst

RedHill Biopharma's recent agreement significantly bolsters its financial health. The injection of approximately 9.9 million in cash and the control over an additional 0.74 million in a restricted account has immediate positive implications for liquidity. Furthermore, the net reduction in liabilities by approximately 2.3 million strengthens the balance sheet. From a retail investor's perspective, this improved financial positioning could lead to enhanced shareholder value as the company demonstrates stronger fiscal discipline. Additionally, eliminating the lien on Talicia® and ending existing credit ties streamlines operations, potentially reducing overhead costs associated with managing these obligations.

Market Research Analyst

The removal of encumbrances linked to the previous Movantik divestment and Credit Agreements is a strategic move that frees up RedHill Biopharma to focus on its core activities—R&D and commercialization. This could catalyze a shift in the company's growth trajectory, making it more appealing to both existing and potential investors. By restoring control over cash collections, RedHill can redirect resources more efficiently into high-potential projects, potentially accelerating the timeline for bringing new products to market. For retail investors, this operational clarity and renewed focus on growth signal a positive outlook for future returns.

Tech Expert

While the core news pertains to financial restructuring, the implications for RedHill's technology and product development are noteworthy. By freeing up financial resources and reducing liabilities, the company can reallocate funds toward technological advancements in its R&D efforts. This can lead to more innovative solutions in the biopharmaceutical space, enhancing RedHill's competitive edge. For investors, this strategic financial maneuvering could translate into significant technological and operational efficiencies, ultimately leading to better product offerings and market positioning.

TEL-AVIV, Israel and RALEIGH, NC, July 22, 2024 /PRNewswire/ -- RedHill Biopharma Ltd. (Nasdaq: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, today announced the signing of a Global Termination Agreement with Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC (the "Agreement"). As a result of the Agreement, RedHill received approximately $9.9 million in cash and gained full control over an additional $0.74 million currently held in a restricted account, leading to an increase of approximately $12.2 million in liabilities for RedHill, reflecting assumed and settled liabilities between the parties, resulting in a net balance sheet reduction of approximately $2.3 million. In addition, the Agreement ends all existing credit ties with the Agreement parties, removes the existing lien against Talicia^® and restores control over cash collections back to RedHill.

Razi Ingber, RedHill's Chief Financial Officer, said: "We are very pleased to reach this smooth conclusion, which strengthens RedHill's cash position and greatly enhances our ability to manage our cash. The Agreement eliminates substantially all encumbrances related to the previous Movantik divestment and Credit Agreements, allowing us to better focus on our R&D and commercial activities and return the Company to a growth mode. This is a new chapter for RedHill."

About RedHill Biopharma

RedHill Biopharma Ltd. (Nasdaq: RDHL) is a specialty biopharmaceutical company primarily focused on gastrointestinal and infectious diseases. RedHill promotes the gastrointestinal drugs Talicia^®, for the treatment of Helicobacter pylori (H. pylori) infection in adults[1], and Aemcolo^®, for the treatment of travelers' diarrhea in adults^[2]. RedHill's key clinical late-stage development programs include: (i) opaganib (ABC294640), a first-in-class oral broad-acting, host-directed SPHK2 selective inhibitor with potential for pandemic preparedness, targeting multiple indications with a U.S. government collaboration for development for Acute Radiation Syndrome (ARS), a Phase 2/3 program for hospitalized COVID-19, and a Phase 2 program in oncology; (ii) RHB-107 (upamostat), an oral broad-acting, host-directed, serine protease inhibitor with potential for pandemic preparedness is in late-stage development as a treatment for non-hospitalized symptomatic COVID-19, with non-dilutive external funding covering the entirety of the RHB-107 arm of the 300-patient Phase 2 adaptive platform trial, and is also targeting multiple other cancer and inflammatory gastrointestinal diseases; (iii) RHB-102, with potential UK submission for chemotherapy and radiotherapy induced nausea and vomiting, positive results from a Phase 3 study for acute gastroenteritis and gastritis and positive results from a Phase 2 study for IBS-D; (iv) RHB-104, with positive results from a first Phase 3 study for Crohn's disease; and (v) RHB-204, a Phase 3-stage program for pulmonary nontuberculous mycobacteria (NTM) disease.

More information about the Company is available at www.redhillbio.com / X.com/RedHillBio. 

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may discuss investment opportunities, stock analysis, financial performance, investor relations, and market trends. Such statements, including, but not limited to, statements regarding the intended use of net proceeds from the offering, may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words and include statements regarding the risk that the Company will not comply with the listing requirements of the Nasdaq Capital Market ("Nasdaq") to remain listed for trading on Nasdaq, the addition of new revenue generating products, out-licensing of the Company's development pipeline assets, timing of opaganib's development for Acute Radiation Syndrome, non-dilutive development funding from RHB-107 and its inclusion in a key platform study. Forward-looking statements are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, market and other conditions, the risk that the addition of new revenue generating products or out-licensing transactions will not occur; the risk that acceptance onto the RNCP Product Development Pipeline will not guarantee ongoing development or that any such development will not be completed or successful; the risk that the FDA does not agree with the Company's proposed development plans for opaganib for any indication, the risk that observations from preclinical studies are not indicative or predictive of results in clinical trials; the risk that the FDA pre-study requirements will not be met and/or that the Phase 3 study of RHB-107 in COVID-19 outpatients will not be approved to commence or if approved, will not be completed or, should that be the case, that we will not be successful in obtaining alternative non-dilutive development funding for RHB-107, the risk that HB-107's late-stage development for non-hospitalized COVID-19 will not benefit from the resources redirected from the terminated RHB-204 Phase 3 study, that the Phase 2/3 COVID-19 study for RHB-107 may not be successful and, even if successful, such studies and results may not be sufficient for regulatory applications, including emergency use or marketing applications, and that additional COVID-19 studies for opaganib and RHB-107 are likely to be required, as well as risks and uncertainties associated with the risk that the Company will not successfully commercialize its products; as well as risks and uncertainties associated with (i) the initiation, timing, progress and results of the Company's research, manufacturing, pre-clinical studies, clinical trials, and other therapeutic candidate development efforts, and the timing of the commercial launch of its commercial products and ones it may acquire or develop in the future; (ii) the Company's ability to advance its therapeutic candidates into clinical trials or to successfully complete its pre-clinical studies or clinical trials or the development of a commercial companion diagnostic for the detection of MAP; (iii) the extent and number and type of additional studies that the Company may be required to conduct and the Company's receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings, approvals and feedback; (iv) the manufacturing, clinical development, commercialization, and market acceptance of the Company's therapeutic candidates and Talicia®; (v) the Company's ability to successfully commercialize and promote Talicia® and Aemcolo®; (vi) the Company's ability to establish and maintain corporate collaborations; (vii) the Company's ability to acquire products approved for marketing in the U.S. that achieve commercial success and build its own marketing and commercialization capabilities; (viii) the interpretation of the properties and characteristics of the Company's therapeutic candidates and the results obtained with its therapeutic candidates in research, pre-clinical studies or clinical trials; (ix) the implementation of the Company's business model, strategic plans for its business and therapeutic candidates; (x) the scope of protection the Company is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; (xi) parties from whom the Company licenses its intellectual property defaulting in their obligations to the Company; (xii) estimates of the Company's expenses, future revenues, capital requirements and needs for additional financing; (xiii) the effect of patients suffering adverse experiences using investigative drugs under the Company's Expanded Access Program; (xiv) competition from other companies and technologies within the Company's industry; and (xv) the hiring and employment commencement date of executive managers. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 20-F filed with the SEC on April 8, 2024. All forward-looking statements included in this press release are made only as of the date of this press release. The Company assumes no obligation to update any written or oral forward-looking statement, whether as a result of new information, future events or otherwise unless required by law.

Company contact:
Adi Frish
Chief Corporate & Business Development Officer
RedHill Biopharma
+972-54-6543-112
adi@redhillbio.com 

Category: Commercial

[1] Talicia® (omeprazole magnesium, amoxicillin and rifabutin) is indicated for the treatment of H. pylori infection in adults. For full prescribing information see: www.Talicia.com.

[2] Aemcolo® (rifamycin) is indicated for the treatment of travelers' diarrhea caused by noninvasive strains of Escherichia coli in adults. For full prescribing information see: www.Aemcolo.com.

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SOURCE RedHill Biopharma Ltd.

FAQ

What is the financial impact of RedHill Biopharma's (RDHL) recent Global Termination Agreement?

The agreement resulted in a $9.9 million cash influx, control over $0.74 million in a restricted account, a $12.2 million increase in liabilities, and a net balance sheet reduction of $2.3 million for RedHill Biopharma.

How does the Global Termination Agreement affect RedHill Biopharma's (RDHL) Talicia® product?

The agreement removes the existing lien against Talicia®, giving RedHill Biopharma more control over this product.

What changes in cash management did RedHill Biopharma (RDHL) experience from this agreement?

RedHill Biopharma regained control over its cash collections and strengthened its overall cash position, enhancing its ability to manage cash effectively.

How does the Global Termination Agreement impact RedHill Biopharma's (RDHL) future business focus?

The agreement allows RedHill to better focus on its R&D and commercial activities, potentially returning the company to a growth mode by eliminating encumbrances related to previous agreements.