TEL AVIV, RALEIGH - RedHill Biopharma Ltd. (NASDAQ: RDHL) ('RedHill' or the 'Company'), a specialty biopharmaceutical company, today reported its full year 2023 financial results and operational highlights and associated filing of its annual report on Form 20-F for the year ended December 31, 2023.
Dror Ben-Asher, RedHill's Chief Executive Officer, said: 'The RedHill of today is transformed - focused on predominantly U.S. government-funded pipeline development in underserved, sizeable therapeutic areas with a disciplined cost-base and unburdened by debt - we have a very clear direction and value proposition. We are actively pursuing and in discussions with multiple parties regarding strategic business transactions, including potential divestment of certain of our assets and/or our commercial operations, while we focus on the progression of our two lead R&D candidates, opaganib and RHB-107. Both are advancing in programs that are externally funded, predominantly through U.S. government support, and directed at multiple underserved indications that provide both an aggregated multi-billion global market opportunities and potentially advantageous pathways to approval under the FDA Animal Rule2 for certain indications.'
Mr. Ben-Asher continued: 'We believe that growing geo-political instability and current regional conflicts are causes for concern regarding increased potential for both nuclear and chemical threats. Governments across the world and global health organizations have been stepping up their efforts to find new options in the face of these devastating possibilities - especially those that can be delivered in challenging circumstances. Opaganib has now been selected by separate U.S. government-funded programs for evaluation as a nuclear and chemical medical countermeasure for Acute Radiation Syndrome (ARS) and Sulfur Mustard exposure. RHB-107 has been selected for inclusion in the predominantly U.S. Department of Defense (DoD)-funded 300-patient ACESO PROTECT platform trial for early COVID-19 outpatient treatment, for which screening has commenced and first patients are expected to be enrolled imminently. In addition, in U.S. Army studies, both opaganib and RHB-107 have delivered positive results in pre-clinical testing against Ebola - a disease with a more than 50% mortality rate for which innovation in therapy is desperately needed. Opaganib, we believe, became the first host-directed molecule to show activity in vivo in Ebola virus disease, delivering a statistically significant increase in survival, while both opaganib and RHB-107 showed an in vitro synergistic effect with remdesivir in viral inhibition. Both opaganib and RHB-107 are novel, oral, host-directed small molecule drugs, with demonstrated safety and efficacy profiles, that are well-suited to counter nuclear/chemical exposure and viral pandemic scenarios, being mutation-resistant and easy to administer and distribute.'
Financial results for the 12 months ended December 31, 20233
Net Revenues for the year ended December 31, 2023, were $6.5 million, compared to $61.8 million for the year ended December 31, 2022. The decrease was primarily attributable to the divestiture of Movantik. Talicia net revenues for the year ended December 31, 2023, increased to $8.8 million from $7.7 million for the year ended December 31, 2022, driven mainly by a 15% increase in gross revenues, with stable Gross-to-Net. Net revenues for the year ended December 31, 2023, were reduced by ($2.6) million in contra-revenues for Movantik, largely from returns.
Cost of Revenues for the year ended December 31, 2023, was $3.5 million, compared to $33.3 million for the year ended December 31, 2022. This decrease was primarily attributable to the divestiture of Movantik. As a result of this divestiture, both the recognition of revenues and the associated cost of revenues for this product were discontinued starting from February 2, 2023. Additionally, the amortization of the intangible asset related to Movantik was also discontinued as of that date.
Gross Profit for the year ended December 31, 2023, was $3.1 million, compared to $28.5 million for the year ended December 31, 2022, in line with the decrease in Net Revenues and Cost of Revenues as explained above and primarily attributable to the divestiture of Movantik.
Research and Development Expenses for the year ended December 31, 2023, were $3.5 million, as compared to $7.3 million for the year ended December 31, 2022. The difference is attributable to the completion of clinical trials related to COVID-19 and RHB-107, and to ongoing cost-reduction measures.
Selling, Marketing and General and Administrative Expenses for the year ended December 31, 2023, were $31.0 million, as compared to $64.0 million for the year ended December 31, 2022. The difference was primarily attributable to the ongoing cost-reduction measures and to the divesture of Movantik as described above.
Other Income for the year ended December 31, 2023, was $44.1 million, as compared to no other income recognized for the year ended December 31, 2022. The other income was comprised of (i) $35.5 million from the divestiture of Movantik, calculated as the difference between the fair value of the rights and the carrying amount of this asset and (ii) $8.6 million from transitional services fees provided to the buyer of Movantik.
Operating Income for the year ended December 31, 2023, was $12.6 million, compared to operating loss of $42.8 million for the year ended December 31, 2022. The difference is primarily attributable to the changes resulting from the divestiture of Movantik, as detailed above.
Financial Income, net for the year ended December 31, 2023, was $11.3 million, compared to Financial Expenses, net of $28.8 million for the year ended December 31, 2022. The income recognized in the year ended December 31, 2023, was primarily attributable to a $20.6 million gain resulting from the extinguishment of the HCR Collateral Management LLC ('HCR') debt in exchange for the transfer of rights to Movantik, calculated as the difference between the carrying amount of the financial liability and the fair value of the rights transferred, partially offset by financial expenses related to the derivative financial instruments and other financial expenses.
Net Income of $23.9 million for the year ended December 31, 2023, as compared to Net Loss of $71.7 million for the year ended December 31, 2022, primarily attributed to the changes resulting from the sale of Movantik and to the ongoing cost-reduction measures, as detailed above.
Total Assets as of December 31, 2023, were $23 million, as compared to $158.9 million as of December 31, 2022. The decrease was primarily attributable to the sale of Movantik, resulting in the transfer of the rights to Movantik, as well as to a significant decrease in the Trade Receivables balance (attributed to the fact that the receivables as of December 31, 2022, were primarily associated with Movantik).
Total Liabilities as of December 31, 2023, were $21 million, as compared to $207.3 million as of December 31, 2022. This decrease was primarily due to the extinguishment of HCR debt in exchange for the transfer of Movantik rights, assumption of certain liabilities by HCR, and payments made towards pre-closing liabilities related to Movantik. Remaining pre-closing liabilities related to Movantik as of December 2023, are estimated at $4.8 million.
Net Cash Used in Operating Activities for the year ended December 31, 2023, was $35.8 million, compared to $29.2 million for the year ended December 31, 2022. The cash used in operating activities was primarily directed towards settling pre-closing liabilities related to Movantik and other operational activities.
Net Cash Provided by Financing Activities for the year ended December 31, 2023, was $21.4 million, comprised primarily of the net proceeds from offerings and exercise of warrants in the year ended December 31, 2023, and the decrease in restricted cash, partially offset by repayment of payables in respect of intangible asset purchase.
Cash Balance as of December 31, 2023, was $6.5 million1.
R&D Overview
RedHill's R&D efforts are concentrated on its two lead investigational candidates, opaganib and RHB-107 - with both advancing in programs that are externally funded, predominantly through U.S. government support, and directed at multiple underserved indications that provide both sizeable market opportunities, estimated aggregate to be well in excess of $1 billion globally, and potentially advantageous pathways to approval.
Opaganib's development is focused on a potential role as a nuclear and chemical medical countermeasure in the event of radiation and chemical incidents, while RHB-107 remains focused on the outpatient treatment of COVID-19. Both molecules have also shown promise for potential use in the treatment of the Ebola virus disease, along with other viral pandemic scenarios, and various inflammatory and oncologic conditions.
Both opaganib and RHB-107 are novel, oral, host-directed small molecule drugs with demonstrated safety and efficacy profiles that are ideally suited to nuclear/chemical incidents and viral pandemic scenarios, being viral mutation-resistant and easy to administer and distribute.
Opaganib (ABC294640)4
Opaganib is a first-in-class, orally administered sphingosine kinase-2 (SPHK2) selective inhibitor with potential for broad activity across radioprotection, cancer, inflammatory and viral conditions. Opaganib's host-directed action is thought to work through the inhibition of multiple pathways, the induction of autophagy and apoptosis, and disruption of viral replication, through simultaneous inhibition of three sphingolipid-metabolizing enzymes in human cells (SPHK2, DES1 and GCS). Current focuses of opaganib's development are: Nuclear and chemical medical countermeasures: Opaganib has been selected for evaluation by two U.S. government countermeasures programs for Acute Radiation Syndrome (ARS) and Sulfur Mustard exposure, both funded by the NIH.
Ebola virus disease: U.S. Army-funded and conducted studies suggest opaganib is the first host-directed molecule to show activity in vivo in Ebola virus disease, significantly increasing survival time, and separately, opaganib demonstrated robust synergistic effect in vitro when combined with remdesivir (Veklury; Gilead Sciences, Inc.), improving viral inhibition while maintaining cell viability.
Nuclear and Chemical Medical Countermeasures updates
In November 2022, the Company announced acceleration of opaganib's nuclear radiation protection development program, with newly published data from eight U.S. government-funded in vivo studies, and additional experiments, indicating that opaganib was associated with: Protection of normal tissue, including gastrointestinal, from radiation damage due to ionizing radiation exposure or cancer radiotherapy.
Improvement of antitumor activity, response to chemoradiation, and enhancement of tolerability and survival.
Radioprotective capacity in bone marrow, with opaganib showing enhanced survival in mice irradiated with both lethal and half-lethal whole-body radiation.
Protection of normal tissue, including gastrointestinal, from radiation damage due to ionizing radiation exposure or cancer radiotherapy.
Improvement of antitumor activity, response to chemoradiation, and enhancement of tolerability and survival.
Radioprotective capacity in bone marrow, with opaganib showing enhanced survival in mice irradiated with both lethal and half-lethal whole-body radiation.
In addition, in November 2022, the Company announced additional positive in vivo results from a new pre-clinical study evaluating the effects of opaganib on radiation-induced hematologic and renal toxicity, which suggests that opaganib exerts a protective impact on key hematological and kidney function parameters following total body irradiation (TBI). Development of opaganib as a homeland security nuclear medical countermeasure is currently expected to follow the Animal Rule under which human efficacy studies may not be required, and if approved, may be eligible for a Medical Countermeasure Priority Review Voucher.
In February 2023, the Company announced that the Radiation and Nuclear Countermeasures Program (RNCP), of the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, had selected opaganib for the nuclear medical countermeasures product development pipeline as a potential treatment for ARS. As part of this collaboration, contractors directed and supported by the RNCP will undertake studies, designed in collaboration with us, to test opaganib in established ARS models.
In July 2023, the Company announced that Apogee had been awarded a further $1.7 million in U.S. government funding, via a Small Business Innovation Research (SBIR) grant, which will support research to further the development of opaganib as an MCM for GI-ARS. This grant is in addition and complementary to the multimillion dollar-valued U.S. government RNCP product pipeline development contract awarded to opaganib following its selection by the RNCP for ARS development.
In February 2024, the Company announced that the International Journal of Molecular Sciences published data showing that opaganib protects against radiation-induced lung inflammation and fibrosis in an in vivo mouse model of lung damage following exposure to ionizing radiation.
In March 2024, the Company announced that opaganib had been selected by the U.S. government's Chemical Medical Countermeasure Program and chemical countermeasures research program for evaluation as a potential MCM against inhalation Sulfur Mustard exposure. This selection follows opaganib's previous acceptance into the RNCP for ARS development, providing the potential to see broad activity across both radiation and Sulfur Mustard injuries.
Ebola updates
In October 2023, the Company announced that opaganib delivered a statistically significant increase in survival time when given at 150 mg/kg twice a day (BID) with a 30% mice survival benefit compared to control in a United States Army Medical Research Institute of Infectious Diseases (USAMRIID) in vivo Ebola virus study, making it the first host-directed molecule to show activity in Ebola virus disease.
In December 2023, the Company announced that opaganib demonstrated a robust synergistic effect when combined with remdesivir (Veklury by Gilead Sciences, Inc.), significantly improving viral inhibition while maintaining cell viability, in a new U.S. Army-funded and conducted Ebola virus in vitro study.
RHB-107 (upamostat)5
A novel investigational broad-acting, host-directed once-daily oral antiviral targeting multiple potential indications with a focus on COVID-19 and other viruses as part of a pandemic preparedness approach. RHB-107 targets human serine proteases involved in preparing the spike protein for viral entry into target cells and inhibits several proteases targeting cancer and inflammatory gastrointestinal disease. Because it is host-cell targeted, RHB-107 is expected to also be effective against emerging viral variants with mutations in the spike protein. RHB-107 is well tolerated demonstrating its clinical safety profile in approximately 200 patients6. Current focus for RHB-107 development is: COVID-19 outpatient treatment: Accepted for inclusion in the U.S. DoD-supported 300-patient ACESO PROTECT platform trial for early COVID-19 outpatient treatment, with first patient expected to be enrolled imminently
Ebola virus disease: In U.S. Army-funded and conducted studies RHB-107 also demonstrated robust synergistic effect in vitro when combined with remdesivir
COVID-19 updates
On January 3, 2023, the Company announced publication of positive data from a Phase 2 study of once-daily oral investigational RHB-107 (upamostat) in non-hospitalized symptomatic COVID-19 patients, in the peer-reviewed International Journal of Infectious Diseases. The study showed that RHB-107 successfully met the primary endpoint of safety and tolerability and delivered promising efficacy results, despite the small number of patients in each treatment group, including faster recovery from severe COVID-19 symptoms and 100% reduction in hospitalization due to COVID-19.
In July 2023, the Company announced that RHB-107 had been accepted for inclusion in the U.S. Department of Defense-supported Austere environments Consortium for Enhanced Sepsis Outcomes' (ACESO) PROTECT multinational platform trial for early COVID-19 outpatient treatment. The 300-patient Phase 2 study has received FDA clearance. The study is being conducted in the U.S., Thailand, Ivory Coast, South Africa and Uganda, and is estimated to be completed by end of 2024. The ACESO PROTECT study is an adaptive, randomized, double blind, multi-site Phase 2 platform trial, being conducted by researchers from ACESO and partner organizations, and administered by the Henry M. Jackson Foundation for the Advancement of Military Medicine (HJF).
In December 2023, the Company announced the receipt of non-dilutive external funding, additional to the previously announced U.S. Government funding, which now covers the entirety of the RHB-107 (upamostat) arm of the ACESO PROTECT adaptive platform trial for early COVID-19 outpatient treatment.
Ebola Virus Disease updates
As part of a collaboration with the Therapeutic Discovery Branch of the USAMRIID (US Army Medical Research Institute of Infectious Diseases) in-vitro studies against different strains of Ebola virus and additional viral infectious diseases were undertaken. Initial data from high-content imaging assays provided further support for activities of RedHill candidates against these viral diseases.
In December 2023, the Company announced results from a U.S. Army-funded and conducted Ebola virus in vitro study. RHB-107 demonstrated robust synergistic effect when combined with remdesivir (Veklury by Gilead Sciences, Inc.), significantly improving viral inhibition while maintaining cell viability.
Other R&D updates
RHB-204: On January 26, 2023, the Company announced that the U.S. Patent and Trademark Office (USPTO) issued a Notice of Allowance for the granting of a patent covering orphan drug designated RHB-204's oral fixed-dose combination, methods for treating pulmonary Mycobacterium avium Complex (MAC) disease, and kits comprising a supply of fixed-dose combination products for treating pulmonary MAC disease, expected to protect RHB-2047 through 2041.
RHB-102: On February 16, 2023, the Company announced that following a positive pre-MAA meeting it plans to submit a Marketing Authorisation Application (MAA) to the UK Medicines & Healthcare products Regulatory Agency (MHRA) seeking approval for RHB-102 (Bekinda) for oncology support (management of nausea and vomiting induced by cytotoxic chemotherapy and radiotherapy, also referred to as CINV and RINV) in adults and children over the age of 12.
RHB-204 and RHB-102 are subject to ongoing commercialization / out-licensing / divestment discussions.
About RedHill Biopharma
RedHill Biopharma Ltd. (NASDAQ: RDHL) is a specialty biopharmaceutical company primarily focused on gastrointestinal and infectious diseases. RedHill promotes the gastrointestinal drugs Talicia, for the treatment of Helicobacter pylori (H. pylori) infection in adults11, and Aemcolo, for the treatment of travelers' diarrhea in adults12. RedHill's key clinical late-stage development programs include: (i) opaganib (ABC294640), a first-in-class oral broad-acting, host-directed SPHK2 selective inhibitor with potential for pandemic preparedness, targeting multiple indications with a U.S. government collaboration for development for Acute Radiation Syndrome (ARS), a Phase 2/3 program for hospitalized COVID-19, and a Phase 2 program in oncology; (ii) RHB-107 (upamostat), an oral broad-acting, host-directed, serine protease inhibitor with potential for pandemic preparedness is in late-stage development as a treatment for non-hospitalized symptomatic COVID-19, with non-dilutive external funding covering the entirety of the RHB-107 arm of the 300-patient Phase 2 adaptive platform trial, and is also targeting multiple other cancer and inflammatory gastrointestinal diseases; (iii) RHB-102, with potential UK submission for chemotherapy and radiotherapy induced nausea and vomiting, positive results from a Phase 3 study for acute gastroenteritis and gastritis and positive results from a Phase 2 study for IBS-D; (iv) RHB-104, with positive results from a first Phase 3 study for Crohn's disease and (v) RHB-204, a Phase 3-stage program for pulmonary nontuberculous mycobacteria (NTM) disease.
Forward Looking Statements
This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995 and may discuss investment opportunities, stock analysis, financial performance, investor relations, and market trends. Such statements may be preceded by the words 'intends,' 'may,' 'will,' 'plans,' 'expects,' 'anticipates,' 'projects,' 'predicts,' 'estimates,' 'aims,' 'believes,' 'hopes,' 'potential' or similar words and include statements regarding the potential divestment of certain of our assets and/or commercial operations, progress of the R&D activities for opaganib and RHB-107, including timing of opaganib's development for Acute Radiation Syndrome and the potential market opportunity for opaganib and RHB-107. Forward-looking statements are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, market and other conditions, the risk that the Company will not comply with the listing requirements of the Nasdaq Capital Market ('Nasdaq') to remain listed for trading on Nasdaq, the risk that the potential divestment of certain of our assets and/or commercial operations will not occur or will be delayed, the risk of delay in the R&D activities for opaganib or RHB-107, including the ACESO PROTECT platform trial for early COVID-19 outpatient treatment, the risk that opaganib or RHB-107 are not found to be well-suited to counter nuclear/chemical exposure and viral pandemic scenarios, risk that acceptance onto the RNCP Product Development Pipeline will not guarantee ongoing development or that any such development will not be completed or successful; the risk that the FDA does not agree with the Company's proposed development plans for opaganib for any indication, the risk that observations from preclinical studies are not indicative or predictive of results in clinical trials; that the RHB-107 Phase 2 ACESO PROTECT platform trial for early COVID-19 outpatient treatment may not be successful and, even if successful, such studies and results may not be sufficient for regulatory applications, including emergency use or marketing applications, and that additional COVID-19 studies for opaganib and RHB-107 are likely to be required, as well as risks and uncertainties associated with the risk that the Company will not successfully commercialize its products; as well as risks and uncertainties associated with (i) the initiation, timing, progress and results of the Company's research, manufacturing, pre-clinical studies, clinical trials, and other therapeutic candidate development efforts, and the timing of the commercial launch of its commercial products and ones it may acquire or develop in the future; (ii) the Company's ability to advance its therapeutic candidates into clinical trials or to successfully complete its pre-clinical studies or clinical trials or the development of a commercial companion diagnostic for the detection of MAP; (iii) the extent and number and type of additional studies that the Company may be required to conduct and the Company's receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings, approvals and feedback; (iv) the manufacturing, clinical development, commercialization, and market acceptance of the Company's therapeutic candidates and Talicia; (v) the Company's ability to successfully commercialize and promote Talicia and Aemcolo; (vi) the Company's ability to establish and maintain corporate collaborations; (vii) the Company's ability to acquire products approved for marketing in the U.S. that achieve commercial success and build its own marketing and commercialization capabilities; (viii) the interpretation of the properties and characteristics of the Company's therapeutic candidates and the results obtained with its therapeutic candidates in research, pre-clinical studies or clinical trials; (ix) the implementation of the Company's business model, strategic plans for its business and therapeutic candidates; (x) the scope of protection the Company is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; (xi) parties from whom the Company licenses its intellectual property defaulting in their obligations to the Company; (xii) estimates of the Company's expenses, future revenues, capital requirements and needs for additional financing; (xiii) the effect of patients suffering adverse experiences using investigative drugs under the Company's Expanded Access Program; (xiv) competition from other companies and technologies within the Company's industry and (xv) the hiring and employment commencement date of executive managers. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 20-F filed with the SEC on April 8, 2024. All forward-looking statements included in this press release are made only as of the date of this press release. The Company assumes no obligation to update any written or oral forward-looking statement, whether as a result of new information, future events or otherwise unless required by law.
Contact:
Adi Frish
Tel: +972-54-6543-112
Email: adi@redhillbio.com
REDHILL BIOPHARMA LTD. 
