A multi-disciplinary team led by insolvency and restructuring partner Stewart Perry (recently named restructuring lawyer of the year at the TRI Awards) has advised the joint administrators, at FRP Advisory, of Redx Pharma plc in a ground-breaking corporate rescue which has seen Redx returned from administration to the control of its directors. All parties hope that the rescue will shortly lead to Redx's shares being re-listed on the AIM market of the London Stock Exchange. This is the first case of which we are aware where a listed company has been successfully rescued from insolvent administration, and the case demonstrates the strength of Fieldfisher's insolvency and restructuring team, as well as its life sciences and equity capital markets teams, which played key roles in the rescue.
Redx Pharma plc, an AIM-listed pharmaceuticals company specialising in the development of cancer treatments, entered administration (together with its subsidiary, Redx Oncology Limited and collectively known as “the Group” or “Redx”) in May 2017, having failed to repay a secured loan. The joint administrators, Jason Baker and Miles Needham of FRP Advisory LLP, concluded at an early stage that the companies could be rescued as going concerns, either by disposing of intellectual property assets, or through a further fundraising on AIM, and engaged Fieldfisher to advise them. The fact that the parent company was listed, that Redx operated in the highly specialised pharmaceuticals sector and was to be traded whilst in administration, raised a number of complex issues which were highly unusual in the context of insolvent administration.
Eventually the joint administrators concluded that it would not be possible to raise sufficient funding from investors and so the joint administrators pursued an alternative strategy of marketing one of the Group’s drug development programs, leading to a sale to US pharmaceuticals company Loxo Inc for US$40 million. The sale was made possible by the involvement of Alison Dennis who leads Fieldfisher's life sciences practice and who was able to advise the administrators on the numerous technical and financial issues arising in relation to the intellectual property rights which were eventually sold.
The sale to Loxo enabled all creditors to be paid in full and eventually an exit from administration, returning Redx to the control of its directors. Throughout the administration period, the Fieldfisher team made a number of novel Court applications on behalf of the joint administrators in order to ensure that the sale could proceed, creditors could be paid and the company taken out of administration.
Stewart Perry commented: "We were delighted to be able to assist Redx’s joint administrators Jason Baker and Miles Needham of FRP Advisory LLP in this highly unusual and at times challenging case. The ability to offer expertise in not only insolvency and restructuring but also life sciences and capital markets enabled us to deliver a complete service to the joint administrators and achieve what I believe to be a fantastic result in this case for all of Redx’s stakeholders."
Jason Baker and Miles Needham of FRP Advisory LLP were joint administrators to Redx Pharma plc and Redx Oncology Limited.
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