DGAP-News: RedHill Biopharma Ltd.: RedHill Biopharma Reports 2016 Second Quarter


DGAP-News: RedHill Biopharma Ltd. / Key word(s): Quarter Results
RedHill Biopharma Ltd.: RedHill Biopharma Reports 2016 Second Quarter

28.07.2016 / 12:00
The issuer is solely responsible for the content of this announcement.

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Press Release

RedHill Biopharma Reports 2016 Second Quarter

Financial Results
RedHill maintains a strong and debt-free balance sheet with $47.7 million
in cash at the end of the second quarter, allowing the Company to continue
to diligently execute its three ongoing Phase III gastrointestinal disease
programs in the U.S. as well as additional clinical programs

Recent key milestones include:

      - First patients dosed in the Phase II study with BEKINDA(TM) for
        diarrhea-predominant irritable bowel syndrome (IBS-D)

      - Positive Type B meeting with the FDA supporting the planned
        confirmatory Phase III study with RHB-105 for H. pylori infection

      - Notice of Allowance from the United States Patent and Trademark
        Office (USPTO) for a new patent covering RHB-105

      - Positive final results from the Phase I study with YELIVA(TM) for
        advanced solid tumors, confirming that the study successfully met
        both primary and secondary endpoints

      - Exclusive license agreement with Grupo JUSTE for the
        commercialization in Spain of RIZAPORT(TM) oral thin-film migraine
        drug

      - Research collaboration with National Institutes of Health (NIH) for
        potential Ebola treatment

Upcoming potential milestones include:

      - Interim data and safety monitoring board (DSMB) analysis of the
        ongoing RHB-104 Phase III study for Crohn's disease

      - Final results from the ongoing Phase IIa study with RHB-104 for
        multiple sclerosis

      - Initiation of three Phase I/II studies with YELIVA(TM) for
        additional oncology and inflammatory indications

      - Top-line results from the ongoing Phase III study with BEKINDA(TM)
        for gastroenteritis

      - Initiation of a confirmatory Phase III study with RHB-105 for the
        treatment of H. pylori infection

TEL-AVIV, Israel, July 28, 2016 RedHill Biopharma Ltd. (NASDAQ: RDHL)
(TASE: RDHL) ("RedHill" or the "Company"), a biopharmaceutical company
primarily focused on development and commercialization of late clinical-
stage, proprietary, orally-administered, small molecule drugs for
inflammatory and gastrointestinal diseases and cancer, reported its
financial results for the quarter ended June 30, 2016.

Financial highlights for the quarter ended June 30, 2016[1]:

Research and Development Expenses for the second quarter of 2016 were $6.0
million, an increase of $0.9 million, compared to $5.1 million in the
second quarter of 2015. Research and Development Expenses for the six
months ended June 30, 2016 were $10.7 million, an increase of $1.8 million,
compared to $8.9 million in the comparable period of 2015. The increase in
2016 resulted primarily from clinical trial costs related to the ongoing
Phase III MAP US study with RHB-104 (Crohn's disease) and from preparations
for several Phase I/II studies with YELIVA(TM) for multiple oncology,
inflammatory and gastrointestinal indications.

General, Administrative and Business Development Expenses in the second
quarter of 2016 were $1.2 million, an increase of $0.4 million, compared to
$0.8 million in the second quarter of 2015. General, Administrative and
Business Development Expenses for the six months ended June 30, 2016 were
$2.4 million, an increase of $0.7 million, compared to $1.7 million in the
comparable period of 2015. The increase was mainly due to enhanced business
development activities.

Operating Loss in the second quarter of 2016 was $7.2 million, an increase
of $1.3 million, compared to $5.9 million in the second quarter of 2015.
Operating Loss for the six months ended June 30, 2016 were $13.1 million,
an increase of $2.5 million, compared to $10.6 million in the comparable
period of 2015. The increase was mainly due to increases in Research and
Development Expenses, as detailed above.

Net Cash Used in Operating Activities in the second quarter of 2016 was
$5.7 million, an increase of $1.0 million, compared to $4.7 million in the
second quarter of 2015. Net Cash Used in Operating Activities for the six
months ended June 30, 2016 was $10.7 million, an increase of $2.6 million,
compared to $8.1 million in the comparable period of 2015. The increase
mainly reflects the increase in Operating Loss, as detailed above.

Net Cash Used in Investment Activities in the second quarter of 2016 was
$2.9 million, compared to Net Cashed Provided by Investment Activities of
$3.5 million in the second quarter of 2015. Net Cash Used in Investment
Activities for the six months ended June 30, 2016 was $7.5 million, an
increase of $3.9 million, compared to $3.6 million in the comparable period
of 2015. The increase in Net Cash Used in Investment Activities was mainly
due to an increase in bank deposits and marketable securities in 2016.

Net Cash Provided by Financing Activities in the second quarter of 2016 was
$0.1 million, compared to an immaterial amount in the second quarter of
2015. Net Cash Provided by Financing Activities for the six months ended
June 30, 2016 was $0.1 million, compared to $13.2 million in the comparable
period of 2015, which resulted mainly from the Company's public offering in
February 2015.

Cash Balance[2]  as of June 30, 2016 was $47.7 million, a decrease of $10.4
million, compared to $58.4 million as of December 31, 2015. The decrease
was a result of the ongoing operations, mainly related to research and
development activities.

"We have achieved several significant clinical and operational milestones
this quarter, while continuing to maintain our financial discipline," said
Mr. Micha Ben Chorin, RedHill's CFO. "With a strong cash position of $47.7
million at the end of the second quarter we are well-positioned to advance
our strategic and operational plans, including the establishment of
commercial operations in the U.S. During the second quarter, we continued
to actively advance our three Phase III-stage gastrointestinal programs. We
are working towards several anticipated milestones, including interim DSMB
analysis of the RHB-104 Phase III study for Crohn's disease, final results
from the Phase IIa study with RHB-104 for multiple sclerosis, initiation of
a confirmatory Phase III study with RHB-105 for the treatment of H. pylori
infection and top-line results from the BEKINDA(TM) Phase III study for
gastroenteritis. In the coming weeks, we expect to provide a mid-year
business update that will highlight the status and timelines for RedHill's
main operations."

Webcast Information:

The conference is available for replay on the Company's website, http://
ir.redhillbio.com/events.cfm, for 30 days.

Recent operational highlights:

 1. On April 11, 2016, RedHill announced that it had initiated a
    randomized, double-blind, placebo-controlled, 2-arm parallel group
    Phase II clinical study in the U.S. evaluating the safety and efficacy
    of BEKINDA(TM) 12 mg in patients with diarrhea-predominant irritable
    bowel syndrome (IBS-D). The study is expected to be conducted in 12
    clinical sites in the U.S. and to enroll 120 patients who will be
    randomized 60:40 to receive either BEKINDA(TM) 12 mg or a placebo, once
    daily, for a period of eight weeks. The primary endpoint for the study
    is the proportion of patients in each treatment group with response in
    stool consistency as compared to baseline, per U.S. Food and Drug
    Administration (FDA) guidance definition. Secondary endpoints include
    the proportion of patients in each treatment group who are pain
    responders and the proportion of patients in each treatment group who
    are responders to the combined endpoints of stool consistency and pain,
    per FDA guidance definition. RedHill further announced, on June 20,
    2016, that the first patients in the Phase II study had been dosed.

 2. On April 18, 2016, RedHill announced that it had concluded a positive
    Type B Meeting with the FDA regarding the path to marketing approval of
    RHB-105 and the planned confirmatory Phase III study for the treatment
    of H. pylori infection. The FDA confirmed, subject to final minutes of
    the meeting, the planned two-arm, randomized, double-blind, active
    comparator design of the confirmatory Phase III study. Based on FDA
    feedback, and subject to successful completion, the planned
    confirmatory Phase III study, along with the successfully completed
    first Phase III study and data from a supportive PK program, are
    expected to support a U.S. New Drug Application (NDA) for RHB-105.

The FDA Type B meeting announcement followed the successful final results
from the first Phase III clinical study with RHB-105 (the ERADICATE Hp
study) reported in March 2016, confirming that the ERADICATE Hp study
successfully met its primary endpoint of superiority over historical
standard-of-care (SoC) eradication rate levels of 70%, with high
statistical significance (p< 0.001). The results demonstrated 89.4%
efficacy
in eradicating H. pylori infection with RHB-105. RHB-105 has been granted
Qualifying Infectious Disease Product (QIDP) designation by the FDA,
providing a Fast-Track development pathway, as well as Priority Review
status, potentially leading to a shorter review time by the FDA of a NDA,
if filed. If approved, RHB-105 will have a total of 8 years of market
exclusivity.

 3. On May 4, 2016, RedHill announced that the U.S. National Cancer
    Institute (NCI) has awarded the Medical University of South Carolina
    (MUSC) a $1.8 million grant to support a broad range of studies on the
    feasibility of targeting sphingolipid metabolism for the treatment of a
    variety of solid tumor cancers. One component of the studies includes a
    planned Phase II study with YELIVA(TM) (ABC294640) for the treatment of
    advanced hepatocellular carcinoma (HCC), the most common primary
    malignant cancer of the liver[3]. The Phase II study, planned to be
    initiated in the third quarter of 2016, will be conducted at MUSC and
    additional clinical sites and is intended to evaluate the efficacy and
    safety of YELIVA(TM) as a second-line monotherapy in patients with
    advanced HCC. The NCI grant covers a five-year period. The Phase II HCC
    study will be further supported by additional funding from RedHill,
    which acquired the exclusive worldwide rights to YELIVA(TM) from Apogee
    Biotechnology Corp. (Apogee).

 4. On June 21, 2016, RedHill announced positive final results from the
    Phase I study with YELIVA(TM) in advanced solid tumors. The results
    confirmed that the study successfully met both its primary and
    secondary endpoints, demonstrating that YELIVA(TM) can be safely
    administered to cancer patients at doses that provide circulating drug
    levels that are predicted to have therapeutic activity, based on levels
    required in preclinical models. The study included the first-ever
    longitudinal analyses of plasma S1P levels as a potential
    pharmacodynamic biomarker for activity of a sphingolipid-targeted drug.
    Administration of YELIVA(TM) resulted in a rapid and pronounced
    decrease in S1P levels over the first 12 hours, with return to baseline
    at 24 hours, which is consistent with clearance of the drug. YELIVA(TM)
    was well tolerated over a prolonged period at doses inducing the
    expected pharmacodynamic effects.

 5. On June 22, 2016, RedHill announced the publication of an article[4]
    demonstrating that the triple combination of the RHB-104 active
    components provides excellent synergistic activity in the inhibition of
    mycobacterial growth, potentially leading to a new and effective
    treatment for Crohn's disease associated with Mycobacterium avium
    subspecies paratuberculosis (MAP) infection.  The article, entitled
    "RHB-104 triple antibiotics combination in culture is bactericidal and
    should be effective for treatment of Crohn's disease associated with
    Mycobacterium paratuberculosis" describes a pre-clinical study intended
    to determine the efficacy of the RHB-104 active components (the
    antibiotics clarithromycin, clofazimine and rifabutin) against MAP
    strains isolated from the blood, tissue and milk of Crohn's disease
    patients. The results of the study demonstrated that the RHB-104 active
    components, in their individual concentrations or in dual combinations,
    were not as effective against all microorganisms, compared to the
    triple combination at minimum inhibitory concentrations level.

 6. On July 5, 2016, RedHill and its co-development partner, IntelGenx
    Corp. (IntelGenx), announced the signing of an exclusive license
    agreement with Grupo JUSTE S.A.Q.F (Grupo JUSTE), for the
    commercialization of RIZAPORT(TM) oral thin-film for acute migraines.
    Under the terms of the agreement, RedHill granted Grupo JUSTE the
    exclusive rights to register and commercialize RIZAPORT(TM) in Spain
    and a right of first refusal for a predefined term for the territories
    of Belize, Carribean, Chile, Colombia, Costa Rica, Dominican Republic,
    El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, the Middle
    East and Morocco. RedHill and IntelGenx are entitled to receive an
    upfront payment and additional milestone payments upon the achievement
    of certain predefined regulatory and commercial targets, as well as
    tiered royalties. Financial terms of the agreement were not disclosed.
    The initial term of the agreement is for ten years from the date of the
    first commercial sale and shall automatically renew for an additional
    two-year term. Commercial launch in Spain is expected to take place in
    the second half of 2017.

 7. On July 13, 2016, RedHill announced the signing of a research
    collaboration agreement with the U.S. National Institute of Allergy and
    Infectious Diseases (NIAID), part of the National Institutes of Health
    (NIH), intended to evaluate RedHill's proprietary experimental therapy
    for the treatment of Ebola virus disease. The new research
    collaboration follows encouraging results from preliminary non-clinical
    studies conducted in conjunction with the NIAID using RedHill's
    proprietary experimental therapy. If successful, this study is intended
    to provide supportive data for discussions with the FDA for potential
    use of the Animal Rule pathway for approval. Ebola virus disease is a
    severe and often fatal illness, which can cause severe hemorrhagic
    fever in humans and has a mortality rate ranging from 25% to 90%[5].
    There is currently no FDA approved treatment for Ebola virus disease.

 8. On July 21, 2016, RedHill announced that it had received a Notice of
    Allowance from the United States Patent and Trademark Office (USPTO)
    for a new patent covering RHB-105. The patent application, entitled
    "Pharmaceutical Compositions For The Treatment Of Helicobacter Pylori"
    expands RedHill's patent portfolio covering RHB-105 and is expected to
    be valid until 2034, once granted. The Company is currently prosecuting
    additional U.S. and international patent applications covering RHB-105.

About RedHill Biopharma Ltd.:
RedHill Biopharma Ltd. (NASDAQ/TASE: RDHL) is a biopharmaceutical company
headquartered in Israel, primarily focused on the development and
commercialization of late clinical-stage, proprietary, orally-administered,
small molecule drugs for the treatment of inflammatory and gastrointestinal
diseases and cancer. RedHill's current pipeline of proprietary products
includes: (i) RHB-105 - an oral combination therapy for the treatment of
Helicobacter pylori infection with successful results from a first Phase
III study; (ii) RHB-104 - an oral combination therapy for the treatment of
Crohn's disease with an ongoing first Phase III study and an ongoing proof-
of-concept Phase IIa study for multiple sclerosis; (iii) BEKINDA(TM)
(RHB-102) - a once-daily oral pill formulation of ondansetron with an
ongoing Phase III study in the U.S. for acute gastroenteritis and gastritis
and an ongoing Phase II study for IBS-D; (iv) RHB-106 - an encapsulated
bowel preparation licensed to Salix Pharmaceuticals, Ltd.; (v) YELIVA(TM)
(ABC294640) - a Phase II-stage, orally-administered, first-in-class SK2
selective inhibitor targeting multiple oncology, inflammatory and
gastrointestinal indications; (vi) MESUPRON(R) - a Phase II-stage first-in-
class uPA inhibitor, administered by oral capsule, targeting
gastrointestinal and other solid tumors; (vii) RP101 - currently subject to
an option-to-acquire by RedHill, RP101 is a Phase II-stage first-in-class
Hsp27 inhibitor, administered by oral tablet, targeting pancreatic and
other gastrointestinal cancers; (viii) RIZAPORT(TM) (RHB-103) - an oral
thin film formulation of rizatriptan for acute migraines, with a U.S. NDA
currently under discussion with the FDA and marketing authorization
received in Germany in October 2015; and (ix) RHB-101 - a once-daily oral
pill formulation of the cardio drug carvedilol.

This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. 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, risks
and uncertainties associated with (i) the initiation, timing, progress and
results of the Company's research, manufacturing, preclinical studies,
clinical trials, and other therapeutic candidate development efforts; (ii)
the Company's ability to advance its therapeutic candidates into clinical
trials or to successfully complete its preclinical studies or clinical
trials; (iii) the extent and number 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; (v) the Company's ability to establish
and maintain corporate collaborations; (vi) 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;
(vii) the interpretation of the properties and characteristics of the
Company's therapeutic candidates and of the results obtained with its
therapeutic candidates in research, preclinical studies or clinical trials;
(viii) the implementation of the Company's business model, strategic plans
for its business and therapeutic candidates; (ix) 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; (x)
parties from whom the Company licenses its intellectual property defaulting
in their obligations to the Company; (xi) estimates of the Company's
expenses, future revenues capital requirements and the Company's needs for
additional financing; (xii) competitive companies and technologies within
the Company's industry; and (xiii) the impact of the political and security
situation in Israel on the Company's business. 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 February 25, 2016. All forward-
looking statements included in this Press Release are made only as of the
date of this Press Release. We assume no obligation to update any written
or oral forward-looking statement unless required by law.


<pre>


Company contact:                                      IR contact (U.S.):
Adi Frish                                             Marcy Nanus
Senior VP Business Development & Licensing            Senior Vice President
RedHill Biopharma                                     The Trout Group
+972-54-6543-112                                      +1-646-378-2927
adi@redhillbio.com                                    Mnanus@troutgroup.com


</pre>



REDHILL BIOPHARMA LTD.
CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

<pre>


                       Three months ended          Six months ended
                       June 30,                    June 30,
                       2016          2015          2016       2015
                       U.S. dollars in thousands

REVENUES                        1             1          1              2
RESEARCH AND                6,031         5,090     10,707          8,919
DEVELOPMENT
EXPENSES, net
GENERAL,                    1,164           801      2,391          1,728
ADMINISTRATIVE AND
BUSINESS
DEVELOPMENT
EXPENSES
OPERATING LOSS              7,194         5,890     13,097         10,645
FINANCIAL INCOME              666           167      1,025             91
FINANCIAL EXPENSES             24           873          4            684
FINANCIAL EXPENSES          (642)           706    (1,021)            593
(INCOME), net
LOSS AND                    6,552         6,596     12,076         11,238
COMPREHENSIVE LOSS
LOSS PER ORDINARY
SHARE (U.S.
dollars):
Basic                        0.05          0.07       0.09           0.12
Diluted                      0.06          0.07       0.10           0.12


</pre>


REDHILL BIOPHARMA LTD.
CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)

<pre>


                            June 30,                December 31,
                            2016                    2015
                            U.S. dollars in thousands
CURRENT ASSETS:
Cash and cash                              3,424                  21,516
equivalents
Bank deposits                             36,766                  36,622
Financial assets at fair                   7,542                       -
value through profit or
loss
Prepaid expenses and                       2,180                   2,372
receivables
                                          49,912                  60,510
NON-CURRENT ASSETS:
Bank deposits                                137                     134
Fixed assets                                 148                     124
Intangible assets                          6,060                   6,060
                                           6,345                   6,318
TOTAL ASSETS                              56,257                  66,828


CURRENT LIABILITIES:
Accounts payable and                       4,755                   3,514
accrued expenses
Payable in respect of                      2,000                   2,000
intangible asset
purchase
                                           6,755                   5,514

NON-CURRENT LIABILITIES
-
Derivative financial                         522                   1,237
instruments
TOTAL LIABILITIES                          7,277                   6,751


EQUITY:
Ordinary shares                              344                     343
Additional paid-in                       120,730                 120,621
capital
Warrants                                   1,057                   1,057
Accumulated deficit                     (73,151)                (61,944)
TOTAL EQUITY                              48,980                  60,077

TOTAL LIABILITIES AND                     56,257                  66,828
EQUITY


</pre>



REDHILL BIOPHARMA LTD.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)

<pre>


                   Three months ended        Six months ended
                   June 30,                  June 30,
                   2016         2015         2016          2015
                   U.S. dollars in thousands
OPERATING
ACTIVITIES:
Comprehensive        (6,552)      (6,596)      (12,076)      (11,238)
loss
Adjustments in
respect of
income and
expenses not
involving cash
flow:
Share-based              495          294           869           616
compensation to
employees and
service
providers
Depreciation              11            8            21            17
Unrealized             (514)          869         (715)           621
losses (gains)
on derivative
financial
instruments
Fair value              (54)            -          (62)             -
gains on
financial
assets at fair
value through
profit or loss
Revaluation of          (89)           14         (147)            10
bank deposits
Exchange                  41        (114)          (41)            53
differences in
respect of cash
and cash
equivalents
                       (110)        1,071          (75)         1,317
Changes in
assets and
liability
items:
Decrease               (248)          796           192         1,502
(increase) in
prepaid
expenses and
receivables
Increase in            1,173           49         1,241           367
accounts
payable and
accrued
expenses
                         925          845         1,433         1,869
Net cash used        (5,737)      (4,680)      (10,718)       (8,052)
in operating
activities
INVESTING
ACTIVITIES:
Purchase of             (16)          (5)          (45)           (7)
fixed assets
Purchase of                -      (1,500)             -       (1,575)
intangible
assets
Change in            (2,000)        5,000             -       (2,000)
investment in
current bank
deposits
Purchase of            (908)            -       (7,480)             -
financial
assets at fair
value through
profit or loss
Net cash             (2,924)        3,495       (7,525)       (3,582)
provided by
(used in)
investing
activities
FINANCING
ACTIVITIES:
Proceeds from              -            -             -        13,198
issuance of
ordinary
shares, net of
expenses
Exercise of              100           36           110            36
options into
ordinary
shares, net
Net cash                 100           36           110        13,234
provided by
financing
activities
INCREASE             (8,561)      (1,149)      (18,133)         1,600
(DECREASE) IN
CASH AND CASH
EQUIVALENTS
EXCHANGE                (41)          114            41          (53)
DIFFERENCES ON
CASH AND CASH
EQUIVALENTS
BALANCE OF CASH       12,026        8,474        21,516         5,892
AND CASH
EQUIVALENTS AT
BEGINNING OF
PERIOD
BALANCE OF CASH        3,424        7,439         3,424         7,439
AND CASH
EQUIVALENTS AT
END OF PERIOD
Supplementary              4           54            15            80
information on
interest
received in
cash
Supplementary              -            -             -         2,000
information on
investing
activities not
involving cash
flows -
Purchase of
intangible
assets


</pre>

[1] All financial highlights are approximate and are rounded to the nearest
hundreds of thousands.

[2] Including cash, bank deposits and short-term investments.

[3] Gomma AI et al., Hepatocellular carcinoma: epidemiology, risk factors
and pathogenesis, World J Gastroenterol, 2008 Jul 21; 14(27): 4300-8.

[4] Alcedo KP, Thanigachalam S, Naser SA. RHB-104 triple antibiotics
combination in culture is bactericidal and should be effective for
treatment of Crohn's disease associated with Mycobacterium
paratuberculosis, Gut Pathogens, 2016, 8:32.

[5] World Health Organization (WHO), Fact sheet No° 103, January 2016.


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487073 28.07.2016