RedHill Biopharma Receives Nasdaq Notification Regarding Minimum Stockholders' Equity Deficiency

Rhea-AI Summary

RedHill Biopharma (Nasdaq: RDHL) has received a notification from Nasdaq on April 15, 2025, indicating non-compliance with the minimum stockholders' equity requirement for continued listing. The company reported a stockholders' deficit of $4,683,000 in its 2024 Annual Report, falling below Nasdaq's required minimum of $2,500,000 in stockholders' equity.

The notification does not immediately affect RedHill's listing on the Nasdaq Capital Market or its business operations. The company has until May 30, 2025 (45 calendar days) to submit a compliance plan. If accepted, Nasdaq may grant up to 180 calendar days from the notification date to demonstrate compliance.

Positive

• Company has 45 days to submit compliance plan with possibility of 180-day extension if accepted

Negative

• Stockholders' deficit of $4.68 million, significantly below Nasdaq's minimum requirement
• Risk of potential Nasdaq delisting if compliance plan is not accepted or executed successfully
• Company does not meet alternative compliance criteria of market value or net income from operations

Insights

Financial Analyst

Nasdaq's notification reveals RedHill's concerning $4.68M stockholders' deficit, requiring significant financial restructuring to maintain listing status.

RedHill Biopharma's notification from Nasdaq regarding stockholders' equity deficiency highlights serious financial challenges for this specialty biopharmaceutical company. The reported stockholders' deficit of $4,683,000 stands in stark contrast to Nasdaq's minimum requirement of $2,500,000 in equity, creating a substantial $7.18 million gap that must be addressed.

What makes this situation particularly concerning is that this deficit exceeds RedHill's entire market capitalization of approximately $3.26 million. This suggests any equity-raising solution could result in significant dilution for existing shareholders, as the company would need to more than double its current market value just to reach the minimum threshold.

While the immediate consequences are —with no immediate delisting or operational impacts—the 45-day timeline to submit a compliance plan represents a tight window for developing meaningful financial restructuring. Companies facing such deficiencies typically pursue equity offerings, debt conversions, asset sales, or strategic partnerships to bolster their balance sheets.

The vague statement about "looking into various options" without specific strategies increases investor uncertainty. The deficit itself signals that accumulated losses have substantially exceeded the company's paid-in capital, reflecting deeper operational challenges beyond mere compliance issues.

Though Nasdaq may grant up to 180 additional days for implementation if the plan is accepted, RedHill faces an uphill battle given the magnitude of the deficit relative to its size. Investors should prepare for potentially significant corporate actions that could materially alter the company's capital structure in the coming months.

The Notification Letter has no immediate effect on the Company's listing on the Nasdaq Capital Market at this time, nor are the Company's business operations affected by receipt of the Notification Letter

TEL AVIV, Israel and RALEIGH, N.C., April 17, 2025 /PRNewswire/ -- RedHill Biopharma Ltd. (Nasdaq: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, today announced that the Company received a written notification (the "Notification Letter") from the Listing Qualifications Department of the Nasdaq Stock Market LLC ("Nasdaq") dated April 15, 2025, notifying the Company that it is no longer in compliance with Nasdaq Listing Rule 5550(b)(1) (the "Rule").

The Rule requires companies listed on the Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders' equity for continued listing. However, based on the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2024, filed on April 10, 2025, the Company reported a stockholders' deficit of $4,683,000, and does not meet the alternatives of market value of listed securities or net income from continuing operations, and is thus non-compliant with the Rule.

The Notification Letter has no immediate effect on the Company's listing on the Nasdaq Capital Market at this time, nor are the Company's business operations affected by receipt of the Notification Letter. In accordance with the Nasdaq Listing Rules, the Company has 45 calendar days, or until May 30, 2025, to submit a plan to regain compliance. If the plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from receipt of the Notification Letter to evidence compliance.

The Company is looking into various options available to regain compliance and maintain its continued listing on the Nasdaq Capital Market. The Company intends to submit the compliance plan as soon as practicable. There can be no assurance that the Company's plan will be accepted or the Company will be able to regain compliance with the Rule.

About RedHill Biopharma 

RedHill Biopharma Ltd. (Nasdaq: RDHL) is a specialty biopharmaceutical company primarily focused on U.S. development and commercialization of drugs for gastrointestinal diseases, infectious diseases and oncology. RedHill promotes the FDA-approved gastrointestinal drug Talicia, for the treatment of Helicobacter pylori (H. pylori) infection in adults^[1], with submission planned for marketing authorization in other territories. RedHill's key clinical late-stage development programs include: (i) opaganib (ABC294640), a first-in-class, orally administered sphingosine kinase-2 (SPHK2) selective inhibitor with anticancer, anti-inflammatory and antiviral activity, targeting multiple indications with U.S. Government and academic collaborations for development for radiation and chemical exposure indications such as Gastrointestinal-Acute Radiation Syndrome (GI-ARS), a Phase 2 study in prostate cancer in combination with Bayer's darolutamide and a Phase 2/3 program for hospitalized COVID-19 patients; (ii) RHB-204, an all-in-one, fixed-dose, orally administered, combination antibiotic therapy with a planned Phase 2 study for Crohn's disease and Phase 3-stage for pulmonary nontuberculous mycobacterial (NTM) disease; (iii) RHB-104, with positive results from a first Phase 3 study for Crohn's disease; (iv) 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 and is also targeting multiple other cancer and inflammatory gastrointestinal diseases; and (v) 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. RHB-102 is partnered with Hyloris Pharma (EBR: HYL) for worldwide development and commercialization outside North America.

More information about the Company is available at www.redhillbio.com / X.com/RedHillBio. 

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. 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 Company's ability to regain and maintain compliance with the Nasdaq Capital Market's listing requirements; the risk that the addition of new revenue generating products or out-licensing transactions will not occur; the risk of current uncertainty regarding U.S. government research and development funding and that the U.S. government is under no obligation to continue to support development of our products and can cease such support at any time; the risk that acceptance onto the RNCP Product Development Pipeline or other governmental and non-governmental development programs 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 its programs; the risk that the Company's development programs and studies 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 studies may be required; the risk of market and other conditions and 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 any necessary commercial companion diagnostics; (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®; (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 10, 2025. 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.

Company contact:

Adi Frish
Chief Corporate and Business Development Officer
RedHill Biopharma
+972-54-6543-112
adi@redhillbio.com

Category: Corporate

[1] Talicia^® (omeprazole magnesium, amoxicillin and rifabutin) is indicated for the treatment of H. pylori infection in adults. For full prescribing information see: www.Talicia.com.

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SOURCE RedHill Biopharma Ltd.

FAQ

What is the minimum stockholders' equity requirement that RedHill Biopharma (RDHL) needs to maintain for Nasdaq listing?

RedHill Biopharma must maintain a minimum stockholders' equity of $2,500,000 to comply with Nasdaq Listing Rule 5550(b)(1) for continued listing on the Nasdaq Capital Market.

How much time does RedHill Biopharma (RDHL) have to submit a compliance plan to Nasdaq?

RedHill has 45 calendar days, until May 30, 2025, to submit a plan to regain compliance with Nasdaq's listing requirements.

What is RedHill Biopharma's (RDHL) current stockholders' deficit as reported in their 2024 Annual Report?

RedHill reported a stockholders' deficit of $4,683,000 in their Annual Report for the fiscal year ended December 31, 2024.

Will RedHill Biopharma (RDHL) be immediately delisted from Nasdaq due to the equity deficiency notice?

No, the notification has no immediate effect on RedHill's listing on the Nasdaq Capital Market or its business operations at this time.