RedHill Biopharma finalizes agreement to enhance cash position By Investing.com

TEL-AVIV, Israel and RALEIGH, NC – RedHill Biopharma Ltd. (NASDAQ: NASDAQ:), a specialty biopharmaceutical company, today announced a concluded Global Termination Agreement that secures the company approximately $9.9 million in cash and access to an additional $0.74 million. This transaction results in a net balance sheet reduction of about $2.3 million after accounting for an increase of roughly $12.2 million in liabilities, which includes both assumed and settled liabilities.

The Agreement signifies the end of the company’s credit ties with Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC, and it releases the lien against RedHill’s drug Talicia®, restoring control of cash collections to the company. This move is expected to enhance RedHill’s financial flexibility, allowing it to focus more on research and development (R&D) and commercial activities.

Razi Ingber, RedHill’s Chief Financial Officer, remarked on the significance of the Agreement, “We are very pleased to reach this smooth conclusion, which strengthens RedHill’s cash position and greatly enhances our ability to manage our cash.”

RedHill Biopharma is primarily engaged in the development of treatments for gastrointestinal and infectious diseases. The company markets gastrointestinal drugs such as Talicia® for H. pylori infection in adults and Aemcolo® for travelers’ diarrhea. Its pipeline includes late-stage development programs targeting a range of conditions, including COVID-19 and cancer.

The information for this article is based on a press release statement from RedHill Biopharma Ltd.

In other recent news, RedHill Biopharma Ltd. has commenced a Phase 2 trial for its oral antiviral drug, RHB-107, as an outpatient treatment for early COVID-19. This development is part of the Austere Environments Consortium for Enhanced Sepsis Outcomes’ (ACESO) PROTECT platform study, which is supported by the U.S. Department of Defense, among other non-dilutive external sources.

The global trial aims to enroll 300 patients across multiple countries, with an expected completion by the end of 2024. This host-directed therapy has previously shown a significant reduction in hospitalizations in a U.S. Phase 2 study, demonstrating promising efficacy results.

The PROTECT study is an adaptive, randomized, double-blind trial that will assess the time to sustained alleviation or resolution of COVID-19 symptoms. Participants will be monitored for up to 12 weeks, with RHB-107 as the initial investigational product evaluated. Concurrently, RedHill is also developing another drug, opaganib, for different indications. These are recent developments as the company continues to explore additional treatment options for early-stage COVID-19 and enhance pandemic preparedness.

InvestingPro Insights

In light of the recent Global Termination Agreement announced by RedHill Biopharma Ltd. (NASDAQ: RDHL), it’s essential to consider the financial health and market performance of the company for a comprehensive understanding. According to InvestingPro data, RedHill Biopharma holds a market capitalization of $11.58 million USD. The company’s P/E ratio stands at 0.11, which may indicate that the stock is currently undervalued relative to its earnings. However, when adjusted for the last twelve months as of Q4 2023, the P/E ratio turns negative to -0.49, reflecting challenges in profitability. Additionally, the Price / Book ratio for the same period is 5.59, suggesting a premium valuation compared to the company’s net asset value.

RedHill’s revenue for the last twelve months as of Q4 2023 was reported at $6.53 million USD, but it’s important to note that there was a significant revenue decline of 89.43% from the previous year. This substantial decrease may raise concerns about the company’s sales performance and future growth prospects. Furthermore, the company’s stock price has experienced considerable volatility, with a one-week total return of -9.33%, emphasizing the stock’s recent performance struggles.

InvestingPro Tips for RedHill Biopharma highlight a mix of financial strengths and risks. On the positive side, the company holds more cash than debt on its balance sheet, which aligns with the recent announcement of strengthened cash position following the Global Termination Agreement. On the other hand, analysts predict that net income is expected to drop this year, and the company is quickly burning through cash, which could be a cause for investor caution. Additionally, RedHill Biopharma does not pay a dividend to shareholders, which may be a consideration for income-focused investors.

For investors seeking further insights, there are 15 additional InvestingPro Tips available for RedHill Biopharma at https://www.investing.com/pro/RDHL. To access these valuable tips and detailed financial analytics, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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