Liverpool City Council has reacted warmly to the deal that will see US business Loxo Oncology acquire certain patents, intellectual property, contracts and physical materials relating to one of drug discovery business Redx’s development programmes for US$40m.
The deal means that all creditors will be paid in full. Redx went into administration in May after the council called time on an outstanding loan. Redx originated in Liverpool in 2010 and grew before leaving the city completely in 2016, when it consolidated its three subsidiary businesses under one roof by taking 74,000 sq ft at Manchester Science Partnerships’ Alderley Park.
The business owed Liverpool City Council £3.5m, arising from a £2m loan agreed in 2012, initially agreed for two years and then twice extended before maturing in March this year.
A council spokesman said: “The decision by the City Council to call in the administrators was not taken lightly. Today’s announcement proves it was the right course of action when local authorities are seeking to be more commercial in their approach. The council have worked with independent legal and financial advisers throughout the loan period to ensure it maintains a robust approach to managing its investments.
“The council has not only recovered the debt in full but welcomes the news that processes are in place to see the company continuing to operate as a business.”
Jason Baker, partner at FRP and joint administrator of the company, said: “We are pleased to have taken a significant step forwards in line with our strategy towards the rescue of the companies as going concerns.
“This unconditional agreement is for the realisation of certain of the group’s intellectual property assets, the proceeds from which will allow for the creditors of the companies to be paid in full and provide working capital for the group’s continuing business, thus restoring the companies to solvency.
“The administrators anticipate that, upon their review and approval of the management’s final business plan, the company will be set to exit administration. Upon exit from administration the directors of the company will be in a position to request the lifting of the suspension of the company’s shares from trading on AIM.
“Until the exit from administration we shall continue with the discharge of our statutory duties as administrators in the interests of all creditors.”