Resverlogix said today it agreed to license rights for mainland China, Hong Kong, Taiwan, and Macau to its lead cardiovascular disease drug candidate RVX-208 to Shenzhen Hepalink Pharmaceutical.
As part of the deal, Hepalink and an investor in Resverlogix will make equity investments in the Canadian drug developer totaling C$50 million ($41.5 million). Resverlogix also stands to gain up to U.S. $400 million in payments tied to sales milestones and royalties for RVX-208.
RVX-208 is a first-in-class, small molecule selective BET bromodomain. According to Resverlogix, RSV-208 is the first and only BET inhibitor selective in clinical phases for BRD4-BD2, and is being developed as a potential treatment for cardiovascular disease, diabetes, Alzheimer's disease, peripheral artery disease, and chronic kidney disease. Resverlogix plans to study RVX-208 in a Phase III clinical trial in cardiovascular disease patients with diabetes and low HDL.
Resverlogix said it intends to use the net proceeds to fund R&D activities (alone or through strategic collaboration) including clinical trials and clinical development of its product candidates; nonclinical development; plus research, discovery, chemistry and regulatory costs. The company said it also will use part of its proceeds toward repaying outstanding indebtedness and/or interest on that debt; as well as toward general and administrative expenses, capital expenditures, working capital needs, and other general corporate purposes.
Hepalink agreed to a series of annual sales milestones for RVX-208 ranging from RMB 500 million ($80.6 million) to RMB 10 billion ($1.6 billion). Based on meeting these benchmarks, Resverlogix is eligible to receive sales-based milestone payments from Hepalink, each ranging from $5 million to $90 million, as well as royalties based on net sales.
In return, Hepalink agreed to be responsible for all clinical and development costs in the areas covered by the agreement—including a patient population that will be included in Resverlogix's planned Phase III BETonMACE trial.
Hepalink agreed to buy 13.27 million Resverlogix common shares and 1 million common share purchase warrants for C$35 million ($29 million), based on a share price of C$2.67 ($2.22) per unit. Each warrant is exercisable into one common share at CAD$2.67 per share for a period of five years.
Following its equity purchase, Hepalink will hold approximately 12.69% of Resverlogix's common shares—which together with the warrants will be subject to a three year lock-up period. Hepalink will also be entitled to nominate one mutually agreed representative for election to Resverlogix’s board of directors.
Subject to completion of the Hepalink transaction, Resverlogix investor Eastern Capital Limited will purchase 5.6 million common shares and 422,005 common share purchase warrants for a total C$15 million (nearly $12.5 million), also based on C$2.67 ($2.22) per unit.
After its purchase, and assuming it exercises all warrants, Eastern would hold 28,565,544 common shares of Resverlogix representing 25.38% of Resverlogix's issued and outstanding common shares, based on shares outstanding as of today's date.
The license will expire on a region-by-region basis within the areas covered, on either the 15th anniversary of the first commercial sale in such region or the expiry date of the last-to-expire of any licensed patent, whichever is later.
