Redhill Biopharma IPO by end of January

RedHill Biopharma Ltd. has decided to forego an institution tender in its Tel Aviv Stock Exchange (TASE) IPO, and go directly to the public tender by the end of January. RedHill plans to raise NIS 35 million at a company value of NIS 150-170 million, after money. The company is currently on its road show.

Companies normally forego an institutional tender when they are confident in high participation by the general public in the IPO, and when they see no need to guarantee the IPO in advance.

RedHill, founded in 2009, is a drug development company that buys promising drug candidates from financially strapped companies. It has six generic drugs in the pipeline. All the drugs are improvements on current drugs, making it possible to file new patents, and they can usually obtain US Food and Drug Administration (FDA) fast-track approval under the B2505 procedure.

However, three of Redhill's drug candidates have at least one competitor on the market or on the verge of approval, and its candidates have no clear clinical advantage. It is more difficult to attract the attention of large pharmaceutical companies to such products, and while they can be marketed independently, this is a riskier strategy that is not mentioned in RedHill's prospectus.

All six of RedHill's drug candidates are undergoing safety and efficacy Phase I/II clinical trials. Three drugs - RHB-104 (for the treatment of Crohn's disease); an antibiotic RHB-105 against H. Pylori bacteria, and RHB-106, a diarrheic to clear the bowels more pleasantly before colonoscopies - do not have competitors on the market. RHB-104 is the most advanced product. A clinical trial in Australia which used the drug in combination with three antibiotics, found it more effective than current drugs, and RedHill will likely file a protocol for an FDA Phase II/III clinical trial.

Published by Globes [online], Israel business news - www.globes-online.com - on January 25, 2011