RedHill Biopharma shares erase gains after company announces stock offering

The stock was last down 21% at $1.47 and was on track for its worst one-day performance since March 17, when it fell 24%.

RedHill said it has received an additional $1.7 million in U.S. government funding to develop a treatment for gastrointestinal acute radiation syndrome.

The grant from the Small Business Innovation Research fund will go to develop opaganib, an oral small-molecule pill with a five-year shelf life.

The treatment is being developed using animal-model efficacy studies as the basis for approval by the U.S. Food and Drug Administration, instead of human efficacy trials.

“In light of ongoing regional geopolitical instabilities, it is important for us to bring together all the pieces of the development jigsaw for opaganib as a potential medical countermeasure for acute radiation syndrome,” said RedHill CEO Dror Ben-Asher.

The pill is easy to administer and distribute and, if it wins FDA approval, would support government stockpiling for use in mass-casualty radiological or nuclear incidents, he said.

Radiation sickness is rare but could affect large numbers of people in the event of a nuclear accident or attack, he said.

The company has also received funding from the U.S. Government Radiation and Nuclear Countermeasures Program.

Ben-Asher said opaganib is also being evaluated as a treatment for COVID-19 and other indications. RedHill’s pipeline includes treatments for other gastrointestinal and infectious diseases and for cancers.

The direct offering and warrant exercise will raise $3.8 million in gross proceeds, which will be used for general working capital, acquisitions, research and development and general corporate purposes, according to the company. H.C. Wainwright acted as sole placement agent for the deals.

RedHill’s U.S.-listed stock has fallen 67% in the year to date, while the S&P 500
SPX,
+0.34%
has gained 18%.