RedHill Biopharma to get $36 million and US rights to approved drug in deal with Cosmo

Shares of Israel’s RedHill Biopharma (Nasdaq: RDHL) leapt 10% pre-market and were still up 5% at $6.48 inn late morning US trading after the company announced an exclusive license agreement with Cosmo Pharmaceuticals (OTC: CMOPF) for US rights to Aemcolo (rifamycin) for traveler’s diarrhea and a simultaneous private investment by Cosmo.

Cosmo will invest $36.3 million in RedHill at $7.00 per American Depositary Share (ADS), representing approximately 13.5% over the closing price on October 17, 2019, with a 180-day transfer restriction over the closing price on October 17, 2019, with a 180-day transfer restriction.

Following this transaction, RedHill will maintain a debt-free balance sheet with around $59 million of cash and cash equivalents and will be well-positioned to launch RHB-105 (Talicia) for H. pylori infection in the USA with an expanded sales force, if approved by the Food and Drug Administration. The New Drug Application (NDA) for RHB-105 (Talicia) is under priority review by the FDA, with an assigned target Prescription Drug User Fee Act (PDUFA) action date of November 2, 2019.