Redwood Pharma provides an update on the company's future
Stockholm, 23 May 2024. Redwood Pharma AB (publ) announces today that the company is evaluating potential solutions to address its strained financial situation. This is in light of the fact that the minimum level was not reached in the new issue that was announced on March 21, 2024, which resulted in the company not having sufficient funds to pay its outstanding debts. The board has begun negotiations with the company's creditors and at the same time initiated a process with the aim of quickly divesting all assets. Any surplus from the sale will be transferred to the shareholders and the board will then propose at an extraordinary general meeting that the company be deregistered from the Nasdaq First North Growth Market and liquidated.
Redwood Pharma has made significant investments in the development of next-generation dry eye treatments based on the patented and unique IntelliGel formulation. Since a strategic review in 2021, the company has focused its efforts on bringing the RP501 development program to market as a registered medical device, with activities focused on CE approval for the European markets.
On March 21, 2024, Redwood Pharma announced a rights issue with the goal of providing the company with a minimum of SEK 10.7 million and a maximum of SEK 17.6 million to finance the activities required until the submission of a CE application to the European authorities. On May 22, 2024, it was announced that the final outcome of the rights issue had not reached the minimum level of SEK 10.7 million and that the board had therefore decided to cancel the rights issue.
The available funds of the Company will not permit further work to complete a CE application and the Company currently does not have sufficient cash reserves to meet its outstanding obligations to creditors. The board has therefore, together with the management, carefully evaluated various options for the company, its creditors and shareholders.
Redwood Pharma has entered into negotiations with existing creditors to extend payment terms in order to create financial space to implement an expeditious process to divest the company's assets, including the RP501 and RP101 programs and the IntelliGel formulation technology. The purpose is to generate capital to fulfill credit obligations and then transfer any remaining financial funds to the company's shareholders. After this process is completed, the board will propose that the company be deregistered from the Nasdaq First North Growth Market and then liquidated. There are no guarantees that this process will be successful as it is dependent, among other things, on an agreement on extended payment terms with all of the company's creditors.
"We deeply regret that Redwood Pharma has to go through this process, but in light of the current financing climate and the company's financial situation, it is unfortunately necessary. The board and management are determined to explore all potential options that can best meet the interests of our shareholders and creditors," says Redwood Pharma's Chairman of the Board, Ulf Björklund.
The board has not set a specific time frame for completing the above actions. Redwood Pharma is committed to transparency and will keep its shareholders updated on important events throughout the process, taking into account the disclosure obligations set out in applicable laws and regulations.
For further information:
Martin Vidaeus – CEO, phone: 070-232 29 29
Email: martin.vidaeus@redwoodpharma.com
Ulf Björklund – Chairman of the Board, telephone: 070-667 04 40
Email: ulf.bjorklund@redwoodpharma.com
This information is such that Redwood Pharma is obliged to make public according to the EU Market Abuse Regulation (EU no. 596/2014). The information was submitted, through the provision of the specified contact person, for publication on 2024-05-23 13:00 CET.
About Redwood Pharma
Redwood Pharma AB (publ) (Nasdaq First North Growth Market: REDW) develops next-generation treatments for dry eye. More than 300 million people suffer from dry eyes and today’s standard treatment provides only temporary relief and may need to be applied more than ten times a day. Redwood Pharma’s programs are based on IntelliGel – a patented and unique formulation of polymers and water that has the consistency of a drop of water when dropped into the eye, where it immediately forms a viscous, protective and lubricating film that remains for a long time. The company is currently pursuing two development projects: RP501 as a readily available medical device for the first line treatment of dry eye, and the drug candidate RP101 that contains estrogen for the treatment of women who suffer from dry eye after menopause. The company’s Certified Adviser is Erik Penser Bank AB, Box 7405, SE-103 91 Stockholm (+46 8 463 80 00, certifidadviser@penser.se). For more information, visit www.redwoodpharma.com