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Stonegate Capital Partners Initiates Coverage on Resverlogix Corp. (TSX: RVX)

ACCESSWIRE

DALLAS, TX / ACCESSWIRE / March 19, 2018 / Resverlogix Corp. (RVX.TO).

COMPANY DESCRIPTION

Resverlogix Corp., based in Calgary, Canada, and San Francisco, CA, is in the advanced clinical stages of developing its lead small molecule therapeutic apabetalone (RVX-208). This molecule is a first-in-class (and only) selective Bromodomain and ExtraTerminal domain ("BET") inhibitor being used in clinical trials; extensive research has shown that apabetalone can act via an epigenetic mechanism to regulate genes, thereby normalizing gene function, or in essence "hitting the reset button". Resverlogix began its BETonMACE Phase 3 clinical study in cardiovascular disease (CVD) patients with diabetes mellitus and low HDL in October 2015, and top line data is expected by the end of 2018. The Company is also investigating the molecule for the treatment of other diseases such as chronic kidney disease (BETonRENAL Phase 2a), and orphan diseases (Phase 2a for Fabry's Disease) based on the results of previous clinical studies.

SUMMARY

  • The Company's lead molecule apabetalone, or RVX-208, began a Phase 3 study in October 2015 that has fully enrolled over 2400 patients at an estimated 177 sites globally for high-risk type 2 diabetes patients with CVD (first patient randomized and dosing commenced November 2015); Resverlogix expects to report top-line data this year in Q418

  • Within the BETonMACE Phase 3 study, the primary endpoint is the time to first occurrence of MACE; additionally, the trial will test for renal function in a subset population of chronic kidney disease patients as well as assess neurological function with the Montreal Cognitive Assessment (MoCA) in patients over the age of 70

  • RVX-208 has demonstrated a strong safety profile with over 1800 patients treated to date in over 19 countries around the world

  • Apabetalone's clinical results are on top of current standard of care treatments, with many patients being treated already taking high levels of statins, beta blockers, glucose management drugs and ace inhibitors as a result of prior major adverse cardiovascular events (MACE); clinical trial participants have demonstrated reduced risk for future MACE of 57% (p=.0181) with apabetalone, and it is notable that Resverlogix's current target in its BETonMACE Phase 3 trial is a 30% relative risk reduction (previous results documented in Nicholls et al. 2017: American Journal of Cardiovascular Drugs)

  • Recent third-party recognition for apabetalone includes 4 publications in 2017 and 5 already in progress for 2018; additionally, Hepalink, the world's largest supplier of heparin sodium API, has continued to invest, now with ~75M shares (over CAD$122M in equity invested in the Company to date as well as a CAD$8M licensing payment made for US right of first refusal)

  • In addition to the BETonMACE trial, this lead compound has also demonstrated therapeutic effects towards the treatment of high-risk chronic kidney disease (CKD) patients; a Phase 2a study will commence early 2018

  • Management recently announced plans to pursue orphan indications as well for RVX-208, with less costly and more rapid paths to commercialization; a Phase 2a is scheduled to launch patient enrollment for Fabry's disease Q218

  • The markets for which RVX-208 shows therapeutic promise are significant; in the top 7 target markets alone, there are an estimated 10M patients

  • Beyond its agreements already in place with Hepalink, management is also actively in discussions with additional potential partners and licensees, which should enable the Company to quickly go after subsequent approvals; most recently, the Company announced a license agreement with Medison Pharma Ltd. for distribution and marketing rights to apabetalone in Israel

  • As of 1/31/18, the Company reported approximately USD $0.5 million in cash on hand with a reported average monthly cash burn rate of approximately USD $4.7M, which is expected to decrease significantly in the 4th quarter of FY18. During the quarter, Resverlogix paid off its debt and has noted that the Company is currently considering additional funding options to meet its operational needs

  • Based on a DCF analysis of the initial target markets for RVX-208, it appears that given certain assumptions on commercialization, the Company's stock is currently undervalued and could trade in the range of CAD$5.17 - $10.73 per share, with a midpoint of $7.20 (see full report for further details)

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The full report can be accessed by clicking on the link below:

http://www.stonegateinc.com/reports/RVX_MARCH_2018_Final.pdf

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

SOURCE: Stonegate Capital Partners