Resverlogix CEO Says It's in Talks With Suitors, After $100M in Q1 Deals
April 28, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Canadian biotech Resverlogix Corporation is in talks with multiple partners to sell the company, Donald J. McCaffrey, president, chief executive officer of Resverlogix Corporation (RVX.TO), told Bloomberg in an interview Tuesday, though he did not name the suitors or give a price or timeframe.
“We are in discussions with multiple companies, not just one,” McCaffrey, CEO of Calgary-based Resverlogix, told the news service. Any takeover deal with certainly be large enough to put it in the stable of $193.9 billion worth of M&A activity already done in the healthcare sector in 2015.
“We see ourselves as a potential acquisition target,” McCaffrey said. “We are tightly controlled, so we wouldn’t let it go at anywhere near the rates we’re at right now.”
Under a deal announced Monday, Resverlogix will give a 13 percent stake to Shenzhen Hepalink Pharmaceutical Co. for $29 million, while existing investor Eastern Capital will up its holdings to 25 percent for C$15 million.
Resverlogix now also will have future licensing royalties and sales milestone payments worth as much as $400 million for sale of the Hepalink in China, Hong Kong, Taiwan and Macau.
McCaffrey has been vocal about the boom times currently lifting the entire sector—and told BioSpace last month it could be a major boon to all companies involved.
The continued upswing in the biotech sector and an increase in novel science has meant that biotech companies are finding better, more effective ways to treat disease, and that will bring healthcare costs down over the long run, McCaffrey told BioSpace in mid-March.
“The boom in the biotech sector has been uplifting to the entire industry,” said McCaffrey. “The goal of the industry is to help patients and to treat diseases more effectively and with less toxicities. The more research, the higher the level of understanding about the biology behind diseases, the better our medicines will be.”
McCaffrey said that right now Resverlogix is focused on its main candidate, RVX-208, a BET-Bromodomain inhibitor that reduces the risk of death by cardiac events—a market that is unfortunately growing by leaps and bounds. It is the only company currently developing a BET inhibitor for patients with cardiovascular disease.
“Cardiovascular disease remains the leading cause of death in industrialized countries and is the largest cost driver to health systems. Patients with diabetes mellitus (DM) and CVD are at especially high risk for cardiac events and death,” said McCaffrey. “The American Heart Association estimates between 2012 and 2030, the total direct and indirect medical costs of CVD are projected to increase from $579 billion to $1,208 billion.”
Overall, approximately 68 percent of patients older than 65 years of age with DM will die from some form of heart disease. McCaffrey said the problem is that so far, drugs for diabetes that target glucose don’t reduce the risk of major cardiac events in diabetic patients.
Resverlogix is hoping RVX-208 will change all that. BET Bromodomain inhibition is an epigenetic mechanism that can turn disease-causing genes either on or off, returning them to a healthier state. Because RVX-208 is the first and only BET inhibitor selective for BRD4-BD2, its safety profile is excellent compared to pan-bromodomain inhibitors.
“For 2015, we are most excited about completing the planning of a Phase III clinical trial for RVX-208 in which we will evaluate the drug’s ability to reduce major adverse cardiac events (MACE) such as heart attacks and strokes in patients with established CVD and diabetes mellitus and low HDL,” McCaffrey told BioSpace. “The study will also evaluate RVX-208 in patients with chronic kidney disease, a progressive disease that usually is a result of long-standing diabetes.”
In this particular market, the window for innovation is wide, said McCaffrey. While most pharmaceutical efforts involving epigenetic drugs are focused on oncologic diseases, Resverlogix has been evaluating RVX-208 to treat patients with cardiovascular disease for more than a decade.
“In the last few years, we have been able to further elucidate the mechanism by which RVX-208 works and the effect its selective BET inhibition has on the human body. For instance, we have found that RVX-208, has an important and positive impact on five key biological functions,” McCaffrey told BioSpace. “These biologies all play a role in heart disease, diabetes and the events that lead to death in these patients.”
As Boston Booms, What’s Next for Biotech?
After a week that saw Boston biotechs vastly increasing their rosters and a new IBM health unit installed, BioSpace wants your predictions for what Boston can expect in the next year. Get out your crystal ball and tell us what you think is most likely in the cards for Genetown!