Redx Confirms Proposed Business Combination with Jounce has Formally Lapsed
pharmafile | April 3, 2023 | News story | Business Services |
Alderley Park, UK, 3 April 2023 Redx (AIM:REDX), the clinical-stage biotechnology company focused on discovering and developing novel, small molecule, highly targeted therapeutics for the treatment of cancer and fibrotic disease announces that it has agreed with the Takeover Panel and Jounce Therapeutics, Inc. (NASDAQ: JNCE) (“Jounce”) that Jounce shall be released from its obligations to proceed with the offer made pursuant to the announcement released on 23 February 2023 falling under Rule 2.7 of the Takeover Code (the “Offer“) in respect of the proposed all-share merger transaction between Redx and Jounce (the “Business Combination”). As a result, the Offer will lapse.
This follows the earlier announcement by Redx on 27 March 2023 acknowledging the announcement by Jounce that it had entered into a definitive merger agreement to be acquired by Concentra Biosciences, LLC in an all-cash transaction. As a result, the board of directors of Jounce had therefore withdrawn its recommendation of the Business Combination and had notified Redx of the termination of the Co-operation Agreement between Redx and Jounce in respect of the Business Combination.
Lisa Anson, Chief Executive Officer of Redx said: “Although it is clearly disappointing that the Business Combination with Jounce will not proceed, Redx continues to demonstrate strong momentum in its pipeline, and we are poised to achieve significant value inflection points from both clinical stage assets and development candidates in the next 12 months. The Board continually evaluates relevant strategic and financial opportunities for the Company, and we will continue to do so in the best interests of our shareholders.”
The board of directors of Redx (the “Board”) continues to believe in the prospects of Redx and its ability to drive progression of its portfolio. With an experienced management team, a differentiated portfolio of best-in-class, or first-in-class clinical assets and industry leading R&D capabilities, Redx is well-positioned to achieve its near-term milestones and create long-term shareholder value. Redx continues to demonstrate momentum in progressing its pipeline and the strength of its R&D capabilities- underscored earlier this year by the FDA approval of pirtobrutinib (Jaypirca™, Eli Lilly), a drug originally discovered and developed by Redx. Recruitment into Redx’s RXC007 Phase 2a clinical trial in Idiopathic Pulmonary Fibrosis (IPF), is progressing well and the study remains on track to provide topline data in Q1 2024. RXC007, the Company’s lead asset, is a next-generation selective Rho Associated Coiled-Coil Containing Protein Kinase 2 (ROCK2) inhibitor. RXC007 has also demonstrated proof-of-concept in several immune-mediated preclinical models which supports the further development of RXC007 in a number of additional fibrotic diseases. Encouraging data from an ongoing collaboration with the Garvan Institute of Medical Research has also shown the potential of Redx’s ROCK2 inhibitors in cancer-associated fibrosis, such as that seen in pancreatic cancer. Redx has expanded its ROCK portfolio with RXC008, a GI-targeted ROCK inhibitor and potential first-in-class treatment for fibrostenotic Crohn’s disease, which is progressing towards a Clinical Trial Authorisation (CTA) submission in 2023. In Redx’s oncology pipeline, RXC004, a porcupine inhibitor, is currently progressing through multiple Phase 2 studies in combination with anti-PD-1 therapies in hard-to-treat Wnt-ligand dependent solid tumours, with data expected from these studies by the end of 2023.
Further Information on Why the Offer Will Lapse
The Business Combination was conditional on satisfaction or waiver of the Conditions, including the approval of the issuance of the New Shares by Jounce Shareholders. Following the decision of the board of directors of Jounce to withdraw its recommendation of the Business Combination, Redx believes that there is now no realistic prospect that this Condition will be satisfied. As a result, the Board believes that it is in the best interests of Redx Shareholders, employees, patients and other stakeholders for the situation to be resolved as quickly as possible.
Accordingly, the Board has agreed with the Takeover Panel and Jounce that Jounce shall be released from its obligations under Rule 2.7(b) and Rule 24.1 of the Takeover Code to proceed with the Offer. The Board has withdrawn its recommendation of the Business Combination and will not proceed with the Scheme. As a result, the Takeover Panel has confirmed that the Offer has lapsed and the offer period will now end, and that Jounce will be subject to Rule 35.1 of the Takeover Code from the publication of this announcement. Pursuant to Rule 35.1 of the Takeover Code, Jounce is prohibited from, amongst other things, making any offer for Redx without the consent of the Takeover Panel for a period of 12 months from today’s date.
Defined terms have the meaning given to them in the Rule 2.7 announcement.
The person responsible for the release of this announcement on behalf of the Company is Claire Solk, Company Secretary.