RVX: Phase 3 BETonMACE Trial of Apabetalone Begins Patient Recruitment
By Nisha Hirani, MD & David Bautz, PhD On October 26, 2015, Resverlogix Corp. (RVX.TO) announced commencement of the Phase 3 BETonMACE trial of apabetalone (RVX-208) in high-risk patients with coronary artery disease (CAD) and type 2 diabetes mellitus (DM). Additionally, Resverlogix recently provided a Research and Development Update on apabetalone in New York City. The presentation included analyses of diabetes and chronic kidney disease (CKD) as they relate to cardiovascular disease by BETonMACE clinical steering members. We also learned more about some recent findings from ongoing mechanistic studies focused on cardiovascular risk pathways and apabetalone’s potential in reducing MACE. We will proceed to review apabetalone and share some details from the clinical progress update below. A Review of Apabetalone (RVX-208) Resverlogix’s lead candidate, apabetalone (RVX-208), is a first-in-class small molecule that inhibits BET proteins and has the potential to impact cardiovascular disease, neurodegenerative diseases, diabetes, cancer, and autoimmune diseases. By targeting BET bromodomains, apabetalone has a multimodal approach and impacts several key biological processes that play a role in vascular disease risk. First off, when apabetalone binds to the BET protein, it triggers a cascade of events. Apabetalone induces ApoA-I mRNA production in human hepatocyte cell lines leading to an increase in ApoA-I gene transcription and eventually an increase in endogenous ApoA-I protein production (McLure et al., 2013). This results in the subsequent synthesis of new HDL particles. In addition to ApoA-I/HDL production, apabetalone has been proposed to act on vascular inflammation processes as well as metabolic and thrombotic mediators (below). Currently, apabetalone is the first selective BET bromodomain inhibitor in clinical trials for high-risk vascular disease with patent life extending to 2033. Resverlogix is the first to test apabetalone in the reduction of major adverse cardiac events (MACE) in diabetic and chronic kidney disease (CKD) patients. Analysis of prior Phase 2 clinical trials data (“ASSURE” and “SUSTAIN”) has shown that apabetalone reduces coronary atherosclerosis and major adverse cardiac events in patients with CVD who also have a low level of HDL and elevated CRP, and other select populations with unmet medical need. We have discussed the data from “ASSURE” and “SUSTAIN” in prior reports, and would like reiterate that data have been presented at the American College of Cardiology (ACC) 2014 (Puri et al., 2014), the European Society of Cardiology (ESC) Congress 2014 and the ESC Congress 2015. Because of the link between diabetes and CVD, there appears to be a need for novel therapies that target all aspects of the pathophysiology of cardiovascular disease in diabetes, as we discussed above. Resverlogix believes that the multimodal mechanism of action of apabetalone could potentially reduce cardiovascular risk through BET inhibition for high-risk patients with diabetes (below). Apabetalone is a BET antagonist Apabetalone is a first-in-class, orally active small molecule that acts on epigenetics via selective inhibition of BET proteins. Apabetalone works by binding one of two specialized areas of BET proteins known as bromodomains (BD1 and BD2). Both of these bromodomains can recognize and bind an acetylated lysine, which is a modified amino acid found on histones bound to DNA. This process is referred to as “reading”, which refers to the protein-to-protein interaction of a BET protein finding and binding an acetylated lysine through the actions of the bromodomain. Apabetalone acts on BET proteins, specifically BRD4 with increased selectivity for BRD4-BD2 (below). Commencement of Phase 3 BETonMACE With regulatory confirmation from a European Regulatory Agency now in place, Resverlogix recently announced that apabetalone entered into the Phase 3 BETonMACE clinical trial. The trial is recruiting participants, and management believes that the first patient should be dosed at some point during the fourth quarter of calendar year 2015. As a reminder, the primary endpoint of the BETonMACE trial is designed to show a relative risk reduction of Major Adverse Cardiac Events (MACE) in high-risk cardiovascular type 2 diabetes mellitus patients with coronary artery disease. Resverlogix is incorporating input from Sweden, German and UK Regulatory Authorities for the trial. We expect the trial to take about 3 years to complete. This puts the top-line data in 2018, with the goal to file a new drug application (NDA) during the end of 2018 or early part of 2019. We believe the program will cost in the area of $30 million, but note that exact costs will depend on how many patients are ultimately enrolled since the trial is currently setup to be adaptive. The main objective of the trial will be to confirm MACE reduction by apabetalone as seen in SUSTAIN and ASSURE pooled analysis and also expand safety assessment. The study will be in a larger prospective setting with high-risk patients that have diabetes mellitus and low HDL-C (< 40 mg/dL who are post events). Management also plans to further explore the potential impact that apabetalone may have on inflammation, the complement and coagulation pathways, as well as on platelet improvement in these high-risk patients in the Phase 3 trial. Resverlogix believes that apabetalone is a BET inhibitor that has effects on pathways underlying CVD risk in high-risk patients. Reverse cholesterol transport, ApoA-I and HDL functionality are one part of the mechanism of action of apabetalone that the company will continue to look at over longer treatment durations in the upcoming Phase 3 trial. Additionally, as mentioned above, Resverlogix has come across additional pathways and biomarkers that drive vascular risk that may play a role in the reduced MACE that the company observed. A larger and longer trial would further elucidate which biomarker(s) may be the best to correlate and predict future MACE. BETonMACE will be a randomized, double-blind, placebo-controlled, 2 arm parallel-group study of apabetalone at a dose of 100 mg twice daily (total daily dose of 200 mg) or matching placebo in combination with standard of care statin therapy administered to type 2 diabetes mellitus subjects with history of recent CVD event and HDL-C level < 40 mg/dL males or < 45 mg/dL females. Standard of care statin therapy shall consist of daily dose of either atorvastatin 20-40 mg or rosuvastatin 10-20 mg. After an initial screening period of 1 to 2 weeks during which subjects will be treated with standard of care high potency statin therapy, subjects will be randomized to either apabetalone 100 mg twice daily or matching placebo with continued statin treatment. This combination treatment period will continue for up to 104 weeks. BETonMACE will be conducted in over 150 European and (potentially some U.S. sites) and will be an adaptive trial with a minimum of 2,400 patients and the ability to go up to 4,000 patients if necessary. The primary endpoint of the trial is the time from randomization to the first occurrence of three-point MACE narrowly defined as a single composite endpoint of cardiovascular death or non-fatal myocardial infarction or stroke. The secondary endpoints of the trial includes time from randomization to the first occurrence of MACE broadly defined (including cardiovascular death, non-fatal myocardial infarction, hospitalization for cardiovascular disease events, or stroke) between treatment groups, all-cause mortality, change in lipoprotein concentration, diabetes mellitus variables, alkaline phosphatase and kidney function. Safety endpoints for the trial include incidence of adverse events (AEs), serious adverse events (SAEs), vital sign measurements, clinical laboratory evaluations, Montreal Cognitive Assessment (MOCA) (for subjects over 70 years of age) and physical examination findings. The study is an event-based trial and will continue until at least 250 MACE events have occurred. MACE will be adjudicated by an independent Endpoint Adjudication Committee and the study will be monitored by a Data Safety Monitoring Board. Resverlogix hopes to see a 25-30% MACE reduction with apabetalone as compared to the placebo and the current standard of care statin therapy. It is also important to mention that apabetalone has the potential to expand to other indications, and Resverlogix plans on conducting parallel or subsequent Phase 3 trials in the future. For instance, Resverlogix stated that up to 15-20% of patients enrolled in BETonMACE are anticipated to have stage 3 chronic kidney disease (CKD) and up to 10% are anticipated to have PAD (peripheral artery disease). These subgroups will be analyzed as part of the statistical analysis plan (SAP), and if the data are positive in these subgroups, this could represent important additional indications the company could pursue in the future. Resverlogix is confident that apabetalone is now well-positioned to move forward on an expedited and more affordable registration path. Resverlogix believes there are early revenue opportunities that include regional licensing deals, with discussions underway in high need areas, as well as potential through the orphan pathway. As a reminder, the company closed an equity and licensing deal with Shenzhen Hepalink Pharmaceutical Co., Ltd. for China, Hong Kong, Taiwan and Macau. By pursuing this parallel development program, Resverlogix hopes to expand and speed up revenue streams. Orphan Disease Program On September 24, 2015, Resverlogix announced the commencement of an Orphan Disease Program for Complement Mediated Diseases. Management believes that the new data that we discussed above suggests that apabetalone downregulates different components of the complement and coagulations pathways, which are important to cardiovascular disease as well several orphan diseases. Resverlogix would like to further explore the potential of apabetalone in humans with overactive complement pathways. We believe that apabetalone will be tested in a Phase 2 proof-of-concept pilot study in a small group of patients with Paroxysmal Nocturnal Hemoglobinuria (PNH) in 2016. We believe there is potential for Resverlogix to study other complement mediated diseases, such as atypical hemolytic uremic syndrome (aHUS), and glomerulonephritis in conjunction with apabetalone as well as other pre-clinical BET inhibitors/follow-on compounds (below), but we are not exactly sure the path the company plans to go down at this point. We are unsure at this point if the drug candidates will receive orphan drug designation. Resverlogix does not have any type of orphan drug designation at this point, but we are assuming that this will be the route that the company plans to pursue at some point in the future. If things go well, and apabetalone is approved for PNH, management believes that the orphan drug route will allow for the drug to get to the market sooner, potentially 2 years earlier. Background on Orphan Diseases Orphan diseases are rare diseases that only affect a small percentage of the population. The U.S. FDA classifies orphan diseases as those that affect less than 200,000 in the U.S. There are approximately 7,000 rare diseases characterized to date, with the list continuing to grow. It is estimated that 30 million people in the U.S. are living with rare diseases, which equates to 1 in 10 or 10% of the U.S. population. Across the world, it is estimated that 350 million people are living with some sort of rare disease. Approximately 50% of people affected by rare diseases are children (Global Genes, 2015). Paroxysmal Nocturnal Hemoglobinuria The National Organization for Rare Disorders (NORD) states that paroxysmal nocturnal hemoglobinuria, or PNH, is a rare yet progressive and often life-threatening acquired hematopoietic stem cell disease of the blood. Hematopoietic stem cells give rise to red blood cells. In PNH, red blood cells break down or are prematurely destroyed earlier than normal (hemolysis) by an individual’s own immune system (complement system), with potentially fatal consequences. It is estimated to affect between 1 to 5 million individuals. A quick search on clinicaltrials.gov shows 42 results related to PNH, with 14 being “open studies.” In healthy individuals, RBCs and other blood cell types have specific cell surface proteins that function to inhibit the complement system and ultimately protect cells against formation of the MAC (membrane attack complex). Individuals with PNH have blood cells that are missing a gene called PIG-A. This gene normally allows a substance known as glycosyl-phosphatidylinositol (GPI) to help particular proteins to stick to cells. Without PIG-A, certain proteins are unable to stick to cell surfaces in order to offer protection to the cell against complement substances that are circulating in the blood. Due to the acquired mutation in their hematopoietic stem cells, patients with PNH do not express these host proteins and their red blood cells become subject to complement-mediated destruction. A direct link exists between excessive complement activation and the clinical manifestation of PNH. This process leads to early destruction of red blood cells, and leakage of hemoglobin into the blood, which can pass into the urine (hemoglobinuria) and can lead to renal failure, (U.S. National Library of Medicine, 2014) as well as repeated, potentially fatal blood clots (thromboses) that account for up to 40-67% of PNH mortality. Other symptoms of PNH include extreme fatigue, abdominal pain, and anemia. The resultant excessive red blood cell destruction often causes transfusion dependence in PNH patients. Treatment Options for PNH PNH treatment is often tailored to specific symptoms and includes many different therapeutic and supportive approaches. Treatment often involves steroids that can suppress the immune system to help slow down red blood cell destruction, as well as blood transfusions, supplemental iron and folic acid, anti-coagulation drugs to prevent clot formation, and bone marrow transplantation. The U.S. Food and Drug Administration (FDA) approved Soliris® (eculizumab), an orphan drug, in 2007 for the treatment of PNH. It was the first drug to be approved for PNH, and although it does not cure the disease, it does block the breakdown of red blood cells, and in turn, can prevent thrombosis. Soliris® blocks the complement system of the body that is responsible for destroying blood cells in PNH individuals. Since it does block the immune system, the drug does increase the risk of meningococcal infections, and patients must be vaccinated with a meningococcal vaccine at least two weeks before receiving the first dose of the drug. Soliris® is also approved for the treatment of aHUS. The drug was developed by Alexion Pharmaceuticals and patent expiration occurs in 2021. Soliris® has been the subject of controversy as it has been called one of the most expensive drugs in the world, and. In 2014, it had a U.S. list price of about $440,000 per patient a year. According to EvaluatePharma, worldwide sales of Soliris® in 2014 were $2.2 billion, and estimates sales to be over $2.6 billion in 2015. According to a 2014 report by the International PNH Registry, close to 75% of PNH patients are not receiving Soliris® treatment. Some believe it is only being used in severe cases of PNH due to the high cost of the drug. For these reasons, Resverlogix believes that if apabetalone is successful as a treatment for PNH, it could fill a large unmet medical need for patients with this severe disease. It is still early for us at this point, but we will wait and see approach regarding the orphan disease program, Financial Update Resverlogix recently filed its Certification of Filings for the first quarter fiscal year 2016 ended July 31, 2015. The company reported no revenues in the quarter, and had a net loss of $2.6 million, or $0.03 per share in first quarter ending July 31, 2015. R&D expenses for the first quarter 2016 were $2.2 million vs. $0.7 million for the same time period in 2014. R&D expenditures in the quarter consisted of approximately $1.1 million of clinical costs (including $0.8 million related to the BETonMACE clinical trial, and $0.3 million for sample analysis, regulatory, consultants and insurance related costs), $0.3 million of chemistry costs (chemistry, manufacturing, and controls), $0.1 million of preclinical costs (research, pharmacology, toxicology, drug metabolism, and pharmacokinetics), and $0.4 million of R&D compensation and related costs associated with expansion of clinical staff in preparation for the BETonMACE. G&A expenses for the first quarter 2016 were $1.3 million vs. $1.0 million for the same time period in 2014. G&A expenses in the first quarter 2016 reflect business development costs related to the Hepalink license, and increased compensation and related costs (excluding share-based payments). As a reminder, on July 21, 2015, Resverlogix announced that it closed the previously-announced private placement with Shenzhen Hepalink Pharmaceutical Co., Ltd. ("Hepalink") and Eastern Capital Limited ("Eastern"). On July 8, 2015, Resverlogix had announced that it closed a license agreement with Shenzhen Hepalink Pharmaceutical Co., Ltd. According to the license agreement, should lead candidate apabetalone reach specific annual sales milestones in China, Hong Kong, Taiwan, and Macau ranging from 500 million to 10 billion Renminbi (“Chinese Yuan”) (approximately $80 million to $1.6 billion), Resverlogix will be eligible to receive sales-based milestone payments from Hepalink, each ranging from USD $5 million to $90 million. Additionally, Hepalink will pay Resverlogix an adjusted royalty of 6% of net sales of apabetalone in the territories listed above. The license agreement will expire on a region-by-region basis on the latter of either the 15th anniversary of the first commercial sale in such region or the expiration date of the last-to-expire of any licensed patent. We would like to point out that Hepalink will be responsible for all clinical and development costs in the territories mentioned above, including a patient population that will be included in the upcoming Phase 3 BETonMACE trial. Resverlogix and Hepalink also entered into a definitive stock purchase agreement whereby Hepalink will purchase approximately 13.3 million shares of common stock at CAD $2.67 per share. Hepalink will also be granted roughly 1.0 million 5-year warrants exercisable at CAD $2.67 per share. The transaction provides gross proceeds of CAD $35 million to Resverlogix. After the transaction is completed, Hepalink will hold approximately 12.63% of Resverlogix's common shares, and the common shares and warrants issued to Hepalink will be subject to a lock-up period of three years. Hepalink will also be able to nominate one representative for election to the board of directors of Resverlogix. The Hepalink transaction is now complete, and on July 20, 2015, Eastern Capital Limited purchased 5.6 million common shares and 0.422 million common share purchase warrants, for aggregate consideration of approximately CAD $15 million (US $12 million), or CAD $2.67 per share. Net proceeds, which we estimate to be in the area of CAD $47 million ($37 million USD) will be used to fund research and development activities including clinical development, non-clinical development, research, discovery, chemistry and regulatory costs in addition to repayment of outstanding indebtedness and/or payment of interest thereon as well as general and administrative expenses, capital expenditures, working capital needs and other general corporate purposes. At the end of July 2015, Resverlogix had approximately $48 million in cash and cash equivalents. We believe that the cash position as of the end of July 2015 is enough to fund the activities related to Phase 3 BETonMACE trial. In our opinion, if all goes according to schedule, the first patient in the Phase 3 program will be dosed at some point in the fourth quarter of 2015. Although exact costs will be based on the total number of patients enrolled, we believe the program will cost at least $30 million and take about 3 years to complete. In our opinion, the cash raised from the Hepalink and Eastern Capital Limited will fully fund the Phase 3 BETonMACE trial. Conclusion & Valuation Methodology Resverlogix’s lead product candidate, apabetalone (RVX-208), is the first selective BET bromodomain inhibitor in clinical trials for high-risk vascular disease. Apabetalone is targeting a very specific patient population with low HDL, type diabetes mellitus and chronic kidney disease with a high cardiovascular risk for increased MACE. Based on pooled Phase 2 data, patients who respond best to apabetalone are also taking AstraZeneca’s Crestor® (rosuvastatin), but we do not suspect that will be included in the final label. According to internal analysis conducted by Resverlogix, there is a minimum high-risk market for apabetalone of 18.8 million patients in the top 7 global markets. We have adjusted our model to reflect apabetalone entering Phase 3 BETonMACE. Patients are being recruited for the trial, and we expect that the first patient will be dosed at some point during the fourth quarter of calendar year 2015. Management gave us some pretty good initial inputs for our valuation model and we have slightly ticked these up to 23% probability for high-risk CVD and 16% for diabetes mellitus, and 12% probability for chronic kidney disease for the U.S. We believe these are relatively conservative figures for projecting U.S. revenues, however, we have increased the probabilities for revenues outside of the U.S. to 40% for high-risk CVD and diabetes mellitus and 20% for chronic kidney disease, given the recent news that trial sites were initiated in Europe, and that the first patient should be dosed by year end. Management believes that the product will likely launch in 2021, with sales ramping up over the next several years. We are assuming peak sales in 2027. Management also gave us a 24% discount rate assumption, which we believe is a fair and conservative estimate. We are modeling peak sales of $6.3 billion or approximately $5.7 billion, net of royalties. We have assumed gross sales of $1.5 billion from high-risk cardiovascular disease, $2.7 billion in diabetes mellitus, and $2.1 billion in chronic kidney disease. We also compared our projected peak sales figures to the existing market for at risk CVD patients, including approved drugs like Lipitor® ($13.7 billion peak in 2006), Crestor® ($6.6 billion peak in 2011, $5.5 billion in 2014), Lovaza® ($1.1 billion peak in 2013). We are also using several peak sales estimates we found for recently approved drugs such as Amgen’s and Regeneron/Sanofi’s PCSK9 inhibitors, evolocumab and alirocumab, respectively. We are also including CETP inhibitors, such as Merck’s Phase 3 candidate anacetrapib, on the list of comparable drugs to help us understand the peak sales potential for apabetalone. Wall Street consensus estimates, as well as independent analyst estimates from websites such as TheStreet.com, FierceBiotech, Benzinga, and Seeking-Alpha, for these drugs range between $3 billion to $10 billion. We believe apabetalone, although flying significantly below the radar of these other drugs, has similar peak sales potential, if Phase 3 BETonMACE data are positive. We believe that strong patent position and pharmacoeconomics of apabetalone, combined with a management skill set surrounding CVD and diabetes and a novel approach to addressing the residual risk in high need CVD patients, allows for Resverlogix to be in an interesting position. The company secured access to approximately $37 million USD in new capital through licensing and stock purchase agreements with Hepalink and Eastern Capital, which we believe should fully fund the Phase 3 BETon MACE program. On the other hand, we still believe that there are certain challenges that Reservlogix will continue to face such as proving the long-term hepatic safety of apabetalone use, and significant operating losses that are building up year after year. Additionally, we are still not sure what type of cardiovascular clinical trials the FDA and EMA will require of apabetalone, and we are still uncertain regarding the outcome of Phase 3 BETonMACE. Currently, we believe the company is undervalued as it embarks on the Phase 3 BETonMACE trial. We do want to point out that data from this trial will not likely be available until mid-2018. The recently announced complement-mediated orphan disease program could also provide further upside to our valuation, however at this time it is too early to include in our model. After re-visiting our model, we are changing our ‘Hold’ rating to ‘Buy’ and adjusting our price target to $3.25 given the potential upside to the Resverlogix story. Follow Nisha On Twitter @HiraniMD READ THE LATEST FULL RESEARCH REPORT HERE SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR and to view our disclaimer.
OTC:RVXCF
