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RVPH: Second Quarter Update

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By John Vandermosten, CFA



Second Quarter 2021 Financial and Operational Results

On August 16, 2021, Reviva Pharmaceutical Holdings, Inc. (NASDAQ: RVPH) presented to investors its second quarter 2021 financial and operational results and filed its Form 10-Q with the SEC.

Highlights for the quarter ending June 30, 2021 and to date include:

➢ Report of positive Phase II clinical trial results for acute schizophrenia - April 2021

➢ Close of $30 million public offering – June 2021

Addition of company to Russell Microcap Index - June 2021

Reviva generated no revenues in the second quarter 2021 and expended ($1.79) million in operational costs producing a net loss of ($1.61) million or ($0.12) on a per share basis.

For the quarter ending June 30, 2021 and versus the quarter ending June 30, 2020:

➢ Research & development expense was $374,000 vs $36,000, increasing 926% on higher salary expenditure, increased consulting and drug development costs;

➢ General & administrative expenses was $1.42 million vs $741,000, growing 91% on an increase in salaries, insurance costs and insurance premiums partially offset by a reduction in legal and other fees;

➢ Gain on remeasurement of warrant liabilities was $189,000, absent in the comparable period;

➢ No interest expense was recognized vs $99,000 as the related investor notes were since converted;

➢ Net loss was ($1.61) million vs ($851,000), or ($0.12) and ($0.31) per share, respectively.

At the end of the reporting period, Reviva held $35.8 million in cash on its balance sheet, buoyed by the $34.5 million capital raise completed in June 2021 and existing cash. Management expects this amount to sustain the firm into 2H:22. Cash burn was ($1.34) million in the quarter and ($4.46) million for the first six months of 2021.

Capital Raise

On May 26, Reviva announced pricing for its $30 million target capital raise, which included an overallotment of $4.5 million and closed on June 1, 2021. The public offering sold 9.2 million equity shares and prefunded warrants, including the full exercise of the overallotment option. The offering price was $3.75 per share and the effort raised a gross $34.5 million in proceeds. After subtracting underwriter costs of $3.0 million, net proceeds of $31.5 million remained to fund corporate operations. The transaction included 6.9 million warrants, granted at a rate of 0.75 warrant per equity share or prefunded warrant. Exercise price for the warrants is $4.125 with a five year duration, expiring on June 1, 2026. The funds from the capital raise will be used to continue the clinical development of Brilaroxazine (RP5063) for the treatment of acute and maintenance schizophrenia, for working capital and other general corporate purposes.

Phase III Trial Details

With the close of the financing in June 2021, Reviva is now ready for its Phase III protocol to be affirmed by the FDA, finalize trial locations and obtain Institutional Review Board (IRB) approval at each of the sites. The contract research organization (CRO) has been selected and once the protocol is cleared, we expect the trial to start shortly after. There are now three sites identified that have received IRB approval and Reviva expects a total of 35 sites to be active around the globe. Sufficient amounts of Brilaroxazine are available to start and complete the trial.

As we elaborated in our initiation, two Phase III trials will be launched including a four week efficacy study and a one year safety study in schizophrenia. Based on the construction of the study, which could be impacted by exogenous events, we see the trial lasting 16 – 18 months with results available in 2023.

Full Details of Phase II Trial in Acute Schizophrenia

On April 26, Reviva issued a press release describing full details of its Phase II trial of Brilaroxazine in acute schizophrenia. Among highlights from the study results, the trial met safety and efficacy endpoints, met primary endpoint of reduction in PANSS , achieved well-rounded effects by reducing both positive and negative symptoms and improving social functioning and cognition, and, perhaps most importantly, presented no metabolic and endocrine side effects and no increase in suicidal ideation compared to placebo.

The trial was randomized, double-blind, placebo-controlled, multicenter Phase II trial to assess safety and efficacy of Brilaroxazine in acute exacerbation of schizophrenia or schizoaffective disorder. The trial enrolled 234 subjects. Total PANSS was reduced by 20 points from baseline, statistically significant when compared to placebo.


Reviva has a number of upcoming milestones that relate to the launch of its Phase III trial in schizophrenia. Preparation for Phase II trials for Brilaroxazine in additional indications is underway with regulatory work expected in the next quarters and launch next year. See below for additional detail on recent and upcoming achievements:

➢ Orphan Designation for RP5063 in IPF - April 2018

➢ Narayan Prabhu appointed Chief Financial Officer - November 2020

➢ Tenzing Acquisition Corp. merger completed - December 2020

➢ Completion of $34.5 million public offering – June 2021

➢ Phase III trial design finalization with FDA – September/October 2021

➢ Launch of Phase III RP5063 trial in acute and maintenance schizophrenia – 4Q:21

➢ Regulatory submissions for Pulmonary Arterial Hypertension (PAH) and Idiopathic Pulmonary Fibrosis (IPF) – 4Q:21 / 1Q:22

➢ Launch of PAH and IPF Phase II trials – 2022

➢ Phase III schizophrenia topline data – 1Q:23

Company Pipeline

Antipsychotic Comparison Summary

Our previously published analysis compared data provided in the Huhn et al. meta-analysis and standardized data presented in Reviva’s Phase II trial of Brilaroxazine in acute exacerbation of schizophrenia or schizoaffective disorder. The standardized data was compared directly, where possible, to the data in the meta-analysis. Rankings were established for overall reduction in symptoms, our measure of efficacy. Side-effects that were comparable from the Reviva study were standardized, ranked, and averaged to project the side effect data in one dimension. Together, the data could be displayed in two dimensions, evaluating Reviva’s candidate against major antipsychotics in terms of efficacy versus side effects.

Patients prescribed antipsychotics often must weigh and evaluate the tradeoff of efficacy and side effects. Based on our analysis, Brilaroxazine appears to offer above average efficacy with class-leading lack of side effects, in line with the pharmaco-engineering that led to RP5063 as a candidate. If approved, brilaroxazine should offer patients an option with less of a compromise. For detail on methods for our analysis, please refer to our standalone article.

Key reasons to own Reviva Pharmaceuticals shares:

➢ RP5063 Phase III asset may address an unmet need in schizophrenia and other mental disorders vs. existing therapies

◦ Greater degree of efficacy

◦ Lower level of side effects

◦ Improved discontinuation rate

◦ Addresses negative symptoms

◦ Improved social functioning

◦ Opportunity for approval in multiple mental disorders

◦ Faster onset of action vs. standard of care

◦ Binding to multiple serotonin and dopamine receptors implicated in schizophrenia

➢ Additional RP5063 Phase II ready programs in multiple indications

◦ Bipolar Disorder

◦ Depression

◦ Attention Deficit Hyperactivity Disorder (ADHD)

◦ Alzheimer’s Psychosis/Behavior

◦ Parkinson’s Psychosis

◦ Pulmonary Arterial Hypertension (Group 1)

◦ Idiopathic Pulmonary Fibrosis

➢ RP1208 preclinical programs in development

◦ Depression

◦ Obesity

➢ Potential for intellectual property protection until 2037 for RP5063


As Reviva provides a business update in its second quarter report, the most important recent highlights are the capital raise of $34.5 million and an anticipated initiation of a Phase III study in acute schizophrenia. Upcoming milestones for 2021 also include regulatory submissions to the FDA for Phase II studies in pulmonary arterial hypertension and idiopathic pulmonary fibrosis. At the same time, management is pursuing partnerships to support pipeline development as well as non-dilutive financing opportunities. Management expects current cash reserves to sustain the firm into 2H:22.

In our retroactive analysis of brilaroxazine’s safety and efficacy in comparison with 32 other antipsychotics we find preliminary trends favorable to Reviva’s candidate showing above average efficacy and lower side effects compared with blockbuster antipsychotics. As many patients discontinue their medication due to side effects, remaining on treatment is key to ensuring a benefit. RP5063 may address an unmet need for patients with schizophrenia and other mental disorders, providing a safer, more tolerable and more effective treatment than what is now available. We adjust our valuation to reflect the updated share balance and assign a valuation of $19.00 per share.

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1. Note: comparisons use prior year data as provided in the 10-Q.

2. Positive and Negative Syndrome Scale (PANSS)

3. Metabolic and endocrine side effects include weight gain, elevated blood sugar, increase in lipids, hypothyroidism, and hyperprolactinemia

4. Source: Reviva Pharmaceuticals July 2021 Corporate Presentation.

5. Source: Reviva Pharmaceuticals July 2021 Corporate Presentation.

6. Huhn, M, et al. Comparative efficacy and tolerability of 32 oral antipsychotics for the acute treatment of adults with multi-episode schizophrenia: a systematic review and network meta-analysis. The Lancet, 394(10202), 939-951.

7. Schizoaffective disorder is a combination of schizophrenia symptoms and mood disorder symptoms

8. Compiled by Zacks Analyst Research