Redx surges on 'major breakthrough'

We ran a story last week with the headline "Redx tipped to triple". News on its latest cancer drug had got investors excited and the share price had risen 13% to 37p. Analysts were optimistic. Now, just days later, the company is worth 83% more after testing confirmed the biotech minnow has made a huge breakthrough in antibiotic compounds.

Redx had already flagged that its scientists had identified inhibitors which work as antibiotics against drug-resistant strains of Gram-negative bacteria, but testing on living things makes it official.

"This could have important implications for some of the most difficult to treat antibiotic resistant bacteria such as E. coli and Pseudomonas," said chief executive Neil Murray, who points out that in 2014 there were over 750,000 cases of hospital-acquired pneumonia in the US and Europe.

Treating drug-resistant infections is obviously difficult. They're responsible for more than half a million deaths globally each year, and rising. Those caused by Gram-negative bacteria are especially hard to tackle as they have an additional outer cell membrane not easily penetrated by drugs and antibiotics.

"Developing a truly broad-spectrum antibiotic that can treat infections caused by both Gram-negative, as well as Gram-positive bacteria, would therefore be a major breakthrough in the battle to combat life threatening diseases worldwide," said Murray.

Redx shares rocketed as much as 33% to 67.8p Tuesday, within a penny of a 2016 high. Earlier this month they were worth just 23p, but broker Cantor Fitzgerald thinks they could be worth 105p.

They may be one day, but, in the meantime, investors must be willing to ride out inevitable volatility common among small companies with no profits, limited liquidity and wide spreads. A real test of nerves.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.