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PBA at Noon with Resverlogix – May 12, 2021
Paul Benwell: Good afternoon everyone and welcome to PBA at noon. I’m Paul Benwell and I’m joined by my colleague Sophy Cesar.
Today we have with us Resverlogix, which trades on the big board of the TSX under the symbol RVX.
Resverlogix is a Calgary-based late-stage biotechnology company with the goal of developing epigenetic therapies for the benefit of patients with multi-factorial chronic disease. They are developing Apabetalone a first-in-class small molecule that is a selective [inhibitor of] BET. It is the first therapy of its kind to have been granted US FDA break-through therapy designation for a major cardiovascular indication to help facilitate a time-efficient drug development program including planned clinical trials and plans for expediting manufacturing development strategy. Here to explain to us how it works and how it can help COVID patients is the president and CEO Don McCaffrey. Don when you’re ready you can go ahead and we’ll definitely have some questions for you at the end of the presentation. Thanks so much.
Slide 1: Intro Slide
Don McCaffrey: Alright. Thank you very much Paul. It’s a pleasure to be here today. As most of you should be brand new to this story I guess, I’ll try to keep the science to a minimum. It can get a little detailed so we’ll stick away from that.
Slide 2: Forward Looking Statement
And there we go. The Forward Looking Statement is present.
Slide 3: Reseverlogix at a Glance
Now Resverlogix at a Glance - Just to give you an idea of who we are and what we’re up to - we deal in a type of science called epigenetics. And that is - we all know what our genetics are, our DNA – and Epi means “about” in Latin. So we don’t change our DNA with this technology. What we do is we turn the genes on or off. And our goal is to turn off the disease-causing genes. So we’re about ten years ahead of the world in this technology as far as epigenetics go and it’s a very unique approach.
[Was not sure whether he said about or above. In any case, Epi seems to be translated as upon or over.]
Most drug development takes place at the protein level. So just to simplify, your DNA is coded and it transcribes into messenger RNA. Now we all have become more familiar with that messenger RNA term lately because of the Pfizer and Moderna vaccines. They operate in that advanced zone.
Now what the messenger RNA does is it tells your body what levels of proteins to make up or down. And so 95+% of all drug development takes place at the protein level. And that’s OK if you’re dealing with a disease that involves a single protein being misregulated. However, cardiovascular, diabetes, chronic kidney disease, Alzheimer’s – all of these are multifactorial disease so they’re dealing in hundreds of proteins.
And what we do is try to re-regulate those proteins. So when your DNA sends the original message to messenger RNA telling it what levels to make – in our patients, we’ll use the diabetic as an example – that message has been corrupted. And whether that happened from a disease like COVID, or from diet, or environment – it doesn’t matter, the original message has been corrupted.
So what our technology involves is that between that stage of DNA and messenger RNA where Moderna and Pfizer work is something called transcription. And what we’re doing is we’re turning the clock back so the original DNA message gets sent, not the corrupted one. So we can affect hundreds of proteins at once. So this is a very very novel approach.
So much so that a year ago in 2020 the FDA awarded us – for our main technology dealing with diabetics with cardiovascular disease – they awarded us the FDA breakthrough therapy designation which is the highest designation you can get from the FDA. It is quite an honor, we were the only Canadian company ever to receive such an award, and we were the only cardiovascular drug developer ever to get that award. So clearly they believe in our technology as much as we do and it gives us the fast-forward track for approving our main program through the system. So that has been quite helpful. But then along came COVID and gave us an even faster track and I’ll explain that as we go here.
So this is a very safe drug, and that was part of the approval process for FDA. We already have 4,200 man-years of treatment with this drug, and that is more than all of the vaccines combined. So we have an exceptionally long and strong safety track record which helps us going forward in what we’re doing.
Now we’ve seen positive biological effects with our drug in cardiovascular disease, diabetes, chronic kidney disease, non-alcoholic fatty liver disease, vascular dementia, pulmonary [arterial hypertension], and now COVID-19. So if you looked at that list, it’s pretty much the list of high-risk patients for COVID-19. And there are reasons for that as you’ll learn in this slide deck. So we have a really unique approach here to move forward.
Slide 4: FDA Approves Breakthrough Therapy Designation
This is just a copy of that FDA breakthrough letter. And we have designed the trial going forward. I’ll talk about it a little bit at the end. That’s the go-forward future program but we have a more current one based on this letter [from Health Canada].
Slide 5: Health Canada Approves COVID-19 Trial
So in April of last year we applied for approval from Health Canada to move this into COVID trials. And the reason we did that was because we had been published by numerous universities [sic] - a group of 27 universities got together last March and studied COVID. They broke it down into the 26 proteins involved with that particular virus. And then they went to the journals and they studied 20,000 drugs that had any impact on any one of those particular proteins. And we had impact on multiple points. So they published a very short list of only 63 drugs that had impact on that. That was published in Nature on March 23, 2020. And we were number two on the list. So we were quite excited to see that and started this program. It’s been a little bit slow going to get it off the ground, because there was a lot of buzz and activity and a lot of people out of labs at the same time. So we had to get this particular drug into a virus lab for study – and obviously a high infection type of virus lab for COVID-19. Eventually we got it into the Buffet Cancer Center in Nebraska and into the Monash University down in Brisbane. And we had phenomenally positive results from that data. We published them and they got published in Cell, which is the top publication in the world for biology and biochemistry. There are 298 of them, and every year they’re rated and Cell is number one every year. So this has been vetted again, not only by the FDA but by the scientific community at the highest level possible.
So this letter here allows us to start clinical trials of COVID. We have started already. A clinical trial is very comprehensive. It involves dealing with universities, ethics committees, lining up your principal investigators, special drug deliveries, and shipments around the world – so there’s a lot of activity that goes into this. And first patient in.... I believe this is up on ClnicalTrials.gov now as of probably yesterday or today. If not it will be imminently. And it gives a breakdown of how the trial is designed. It’s been designed by an expert group who has already run 20 different COVID trial - so they know what to look for and how to handle it properly. So we’re in good hands here and it is moving forward quite fast.
It also allows us the ability for the first time ever to get to cash flow. Because just like with COVID and the vaccines Moderna and Pfizer started pre-selling that vaccination long before it was finished and approved or that they even knew it was safe. So for us - we have all those components in place right now, and that is a fast forward for us. We expect it to have quite an impact on our company this year.
If you followed Moderna you’ll know that they pre-sold about three billion dollars of product before they had any product. At least we have the product. So we’re quite pleased with the potential this gives us almost immediately.
Slide 6: Number of US Deaths Due to Current Diseases in 2020
Now this is a slide I showed six months ago at our AGM. And basically it’s showing that at that time there were 250,000 deaths from COVID 19. And this was just in the United States. And people at the time were telling me “well you’re probably late to the party because vaccines are going to be here and they’ll clean everything out”.
Slide 7: Number of US Deaths Due to Current Diseases Updated to April 2021
But this is where we are now. [Slide says 540K, but as of 05/12 it was 583K in US] And the vaccine is necessary and people should take it. I’ve taken mine already. But this is a very very problematic virus. If you think about it in terms of your annual influenza virus, you need a new shot for that every year because it mutates about once or twice a year. COVID-19 has 8 variants already. Eight times in one year. That is a very problematic virus.
The original vaccines will work for a while and they’re already planning the new ones for next year. Unfortunately, well I guess fortunately but unfortunately, companies like Moderna and Pfizer got together and they split up a couple of the main virus variants so they could work on them for next year. And that happens to be the South African one and the UK one. And they’re about three months into that program already. Good on them, because we need to get back to normal. But now, just a few months later, those aren’t even the worst two variants. Now we have Brazil and we have India and we have new ones forming that we don’t even know about yet.
So the importance here is to be able to use a therapeutic in combination with the vaccines to really help eradicate this. And in our case our therapeutic is effective on all of the variants. So I’ll talk about that in just a minute here.
Slide 8: COVID-19 Clinical Trial Launch in Q2 - 2021
Now our hope is to get this clinical trial launched. We’ve had great support from the Canadian government. There’s a funding mechanism in place to get this rolling. It took a while but it’s up and running right now. And this trial will take place primarily in Canada but in Brazil as well. We will do a second follow-on trial in the United States. We applied for a similar program there but the FDA wanted us to bump it right up to an FDA Phase III program, so that’s what we’re doing.
And going forward, this will enable us to hit those sales revenues that have been so elusive for this company. And it’s been a while to get a drug approved, but here we can start selling even before the drug is approved because of the urgency of this particular program.
Slide 9: Publications and Media (Section Slide)
Now publications and such are numerous.
Slide 10: Significant Apabetalone Publications – COVID-19
Cell in the upper left there is one of the key ones. That’s the top one ever. Now how this is working, why it is working so well is this group of 22 universities not only established that we were a high candidate, but they did some work to show how COVID first attaches to a human cell. And it attaches to a protein called BRD4. BRD4 is the exact target that we have studied for twenty years. There’s nobody on this planet that knows more about BRD4 than our company. So a very unique start. But once that virus attaches to the BRD4 its next move is that it enters the cell through a receptor called ACE2.
Slide 11: COVID Announcement and Publication
As you can see here and on the next slide ACE 2 is a key target of Apabetalone. It’s been published - our effectiveness on that of over 90% has been published in journals such as the American Heart Journal in November. So a lot of publication on that.
Now the real problem with COVID is that the virus triggers the human immune system. And it causes what’s called a cytokine storm. You can think of that as a whole bunch of your body’s immune systems - inflammation response – that type of trigger - all being turned on at once. And it stays turned on. Because as soon as it is turned on it attracts BET bromodomain 4, which acts as a foot in the door so you can’t close the door and it stays turned on. So the people dying and severely injured from this disease actually don’t even have COVID anymore. COVID has run its case. And it’s triggered the cytokine storm on the way. So it’s the body’s own immune system that’s causing the damage.
We have shown in humans and various animal models that we can actually turn off that cytokine storm or the proteins involved in it. So it puts us in a very unique spot as a therapeutic. The therapeutics that have been tested, such as Remdesivir – that’s the only one approved – they’re anti-virals. And the problem with this virus is it’s a very stealthy virus. You have it for 7 or 8 days of its 12+ day course before you even know you’ve had it. So if you were able to take an antiviral on day one like Trump did because he was getting tested every day, it would have some impact. His virus medication was Remdesivir. He took five shots of it. It cost $3,200 per shot. That’s pretty restrictive for most patients. You can’t do that on 7 and a half billion people. So this type of therapeutic is a very unique and solid approach going forward.
Slide 12: Broad Media Coverage of COVID-19 Results
Now we have lots of other slides here that I could go through but I think the focus here really is on COVID. And our strength is that we’ve been working on this very area of turning off the cytokine storms and moving this forward. And then along came COVID and lo and behold our drug has a dual impact being able to shut down ACE2 sot that COVID can’t even get inside the cell – and that’s the only place that COVI D can breed so basically we’re stopping it from replicating. And if it does replicate and triggers a cytokine storm, from the same mechanism we shut down cytokine storms. So this is a very unique approach and we’re looking forward to it.
We have a short time frame today so I’m going to stick to the main script. And we can go to Q&A at this time if you like.
Sophy Cesar: Thank you Don. That was very informative. We do have quite a few questions so I’ll get right into it.
Q: John would like to know, “how is your solution administered?”
A: OK John. This is a pill, and it’s delivered twice a day. So our approach with our trial is to pick the weak link in the system here and it’s the hospitals. So our trial design is as soon as the patient comes into the hospital they will be given Apabetalone. And if it responds as it has in the literature and in the animal studies and in the work we’ve done in humans for cytokine storm proteins, they should be walking out of the hospital in 48 hours instead of being wheeled down to a ventilator or worse yet the morgue.
Q: OK, and how long does the drug last in someone’s body?
A: The drug lasts about 11 hours. That’s why you take it twice a day. You really want to have drug on target. So our first patients – they’ll be treated for about 28 days. We probably don’t need all 28 days but this is a new protocol so we want to make sure we get it.
Q: OK, and do you have a plan for the COVID-19 long-haulers?
A: Um, we don’t have a plan for them just yet, but I do believe that they will fit very well into this program because this ACE2 component I talk about, it’s basically a receptor on the outside of the cell. And patients with diabetes, chronic kidney disease, heart disease, obesity – the basic list of who is at high risk – they have way more ACE2 receptors. So by reducing the ACE2 receptors you’ll be able to remove the long haulers. The long-haulers probably have a higher susceptibility to ACE2 receptors – the number of them that they have.
Q: And have any patients been dosed in the COVID trial yet?
A: Not yet. We should have it fairly soon here. We’ve been doing all the pre-work. There is a lot of work. When you get your letter from Health Canada then you can start dealing with the universities and the principal investigators and getting it all lined up, working with a contract research organization, so we’re all in full swing on this. It’s going quite fast.
Q: OK, and here’s another one that Steve asked. Will the patient only receive this drug, and how will they decide who receives it?
A: They’ll be asked upon entering the hospital if they want to participate in this particular clinical trial. And as we go forward and show results, I’m pretty much certain that this will be the trial of choice. There are 3,200 trials ongoing in COVID. So that’s part of why it takes a while to get actually in humans and moving forward. Some of them are ridiculous and shouldn’t even be running. One of them is involving yogurt. And yes, yogurt.
Sophy: That’s a little crazy
Don: That’s a little beyond crazy.
Q: So what is the timing of the read-out on the ongoing 100 person trial?
A: That should be around August. If we can get it faster we will. And the read-out doesn’t involve corporate progress. We have lots of stuff ongoing on other trials, including the US one which will be designed as a Phase III and our ability to procure drug. And this has been very effective for the vaccine people; I’m glad they set the precedent. Countries like Israel and the United Arab Emirates - there’s a reason they’re the most vaccinated in the world. It’s because they procured the drug first and paid top dollar to make sure they were covered, whereas in Canada here we’re 42nd on that list. It’s a G7 country. That’s not good enough.
Sophy: No not at all. There are quite a few questions here on Phase II and Phase III, so I’ll break them down.
Q: Is there a commercial opportunity upon completion of Phase II if it’s successful, while Phase III is still ongoing?
A: Yes there is. And we’re working that quite nicely. So with this drug in Alberta here, there have been over 7,000 patients who have been hospitalized in the last year, and of those 2,100 have died. So those numbers aren’t good enough. And if we can give these patients this drug as soon as they check in the hospital. So as soon as we can show the health systems that we do have the proper drug. It’s not an anti-viral that’s being administered too late; it’s actually shutting down what the problem is. The back-end problem of the cytokine storm but it also limits [the virus]. So in the future we’ll be able to give it to patients as soon as they’re diagnosed with COVID. But it’s the ones going to the hospital that are hurting us the most. Because it’s the overload that’s causing the shut-down in the economy. So if we could catch them going into the hospital, we have enough drug right now that we could dose every patient that was hospitalized for the last year in Canada with Apabetalone and clear out the hospitals completely and open our economies. So anybody listening who has contacts with MPs or your MLAs or whatever you have in your particular province, please let them know that this is available. And we can administer it as a clinical trial in a Phase II or III setting to every patient going in to a COVID hospital.
Q: Wow. And so - Is the Canadian Government involved and to what extent?
A: Yes they are and they’re very sensitive about talking about what extent. We have three applications in. One has already been approved. And it had a condition pending the successful arrival of the Health Canada letter which we got April 6th. So we’re very active on that one. And the others are also in progress but we can’t discuss them in detail just yet.
Q: OK. So I have a question here that says what happened to all the work that was done prior to the pandemic, and is it not moving forward and what happens to I guess the uh – the Zen
A: That’s a good question and I’m glad they brought it up, because it’s what got us where we are and it’s definitely what’s going to get us where we’re going.
The problem we have in our society in general in dealing with infectious diseases is nobody wants to fund them. No pharmaceutical company, no big investment group wants to invest in infectious disease. It’s simple. You’re curing your disease and you cannibalize your own industry. So you spend two and a half billion dollars to get a drug to market and then you cure it. That’s not a real big seller in board rooms.
So now this story is different. Because our main program is cardiovascular, diabetes, chronic kidney disease; these are massive markets that are not going anywhere. They’re not shrinking, they’re growing.
So what our questioner there was referring to was our BETonMACE2 trial?
Sophy: Yes there were a couple of those, yeah.
Don: It’s all active and ready to go. We are actually just waiting for the hospitals to clear up a bit. It will probably be August or September before we can really launch that. Because you need your principal investigators and clinic space to be able to run a large trial like that. Oncology trials or smaller ones are much easier. But in that case, there’s no sense in enrolling patients right now, because it would be very slow enrollment for the first while and the trial will end at the same time anyway. So we’re doing it in a cautious and prudent manner. But at the same time it looks like prior to that we’ll be able to be looking at some of our own revenues from procurement of existing and future sales of Apabetalone under emergency management use.
Q: So again on the BETonMACE trial, do you have any large pharmaceutical companies partnering with you on this one?
A: We will be working with a very sophisticated group on that and we will announce that later. That’s not public information yet, but the answer is yes.
Q: And How much – I believe this is referring back to what John was asking I believe on COVID – How much can you supply and how fast to market?
A: We already have about – it’s somewhere around 600 kilograms of finished product and that alone would dose every patient in Canada for over a year. So that’s what we’re working with. But we also have thousands of kilograms of the building materials. There are four compounds that are put together to make Apabetalone. And that process takes about a month to a month and a half. And that material is sitting in a warehouse in India where it is desperately needed. So we have contacted our federal government and their federal government together as far as an effort to help quell that situation, which would further show just - the promise of our drug. So it’s quite encouraging. So hopefully that will proceed. We can’t make any guarantees there yet.
Q: And what’s the cost of each pill on the margin on it?
A: So the cost of the pill that we’re shooting for in the future, because this will be an ongoing program. The original stuff that’s up and ready to go right now would be a lot more expensive than the final product. But the final product will run about $6.85 per pill. That’s U.S. And that’s a very affordable annual program. For COVID it won’t be annual. But for cardiovascular chronic kidney disease, and those types of patients that’s a very affordable program. That comes in around $5,000 a year, whereas COVID medication... A hospitalized patient in any hospital in Canada right now is costing about 23,000 dollars per patient.
Q: Wow. And so uh the gross margin on the pill once the $6 dollar one is going?
A: That’s an unknown number at this time.
Q: OK. Are there any current plans for HIV and end-stage renal disease?
A: Yes, the end-stage renal disease is part of the BETonMACE 2. At the request of the FDA we added a much higher percentage of chronic kidney disease patients because the results were so good in BETonMACE 1, so that’s a real plus.
As far as the HIV work, we plan on continuing that work going forward, but these other programs take precedence just right now.
Q: So I have a question here on when would you see actual revenue specifically?
A: We hope to see it in this quarter but I can’t guarantee that. It is moving quite fast and we’re having some very good and detailed discussions. So in that 600 kilograms that we have, it’s based in three different locations and three different lot sizes. So some was made in Schandorf, Germany, some in Switzerland, and some down in Michigan. So pre-selling those particular allotments first is what we believe will generate our first revenue. And beyond that we can sell future product that we can manufacture at any one of those three sites or other sites that we can set up in the very near future. It would take at least three months to set up a new site, so these three are our preferred sites.
Q: We have another question here going back to trials. If the pending trials are successful, how many more trials are needed to secure drug status, and this actually goes into another part to the question – and is executive planning ongoing if they are granted drug status or do you have an interested party with an established network for drug distribution? Whoo, that’s a big one there for you.
A: Yes we have a very detailed commercial plan that will be announced shortly.
Q: OK perfect. And then I guess just one last one before Paul has the questions. So you talked about the FDA Phase III trial. Does the company have enough to fund the trial and/or do you have a partner?
A: In that particular one we applied for funding from the NIH in the United States. And it was – I won’t say granted, but it was passed over to – uh for final recommendation from the cardiovascular related department, so it’s going quite well.
Sophy: OK, excellent. Paul did you have a question or two?
Paul: Just a couple.
Q: Could this be taken Don as a preventative drug?
A: I believe it will in the future, because as I mentioned the initial contact with a human cell is BET Bromodomain 4. And it binds in the exact same pocket that our drug does. So it’s called the E envelope. So if our drug is sitting there in the E envelope COVID can’t even bind to that cell. So it will be helpful as a preventative. But more so, the earlier stage you can get this the better, so stopping it from entering the cell. So once that virus enters the cell it takes over the cells exiting machinery and it becomes just this little mini COVID factory pumping out the COVID and then the immune system response kicks in. But all three stages there - both the original contact, shutting down of the ACE2, and then shutting down the cytokine storm all involves Bromodomain, 4 BRD-4. So our twenty years of work on that are about to pay off in a big way. Also when you shut down ACE2 – all of the COVID variants enter the same way. Not only that but even the simple common cold uses ACE 2 to enter the cell. So this has a very broad-reaching impact on medicine, no question about it.
Q: Excellent. Do you think the drug is going to be covered by insurance companies?
A: I would assume so, yes. And part of it is pricing. The last drug I saw to get rejected from insurance companies was last week and it was in Germany. And it was priced 1.8 million dollars per patient. So – rejected.
A course here even at the higher initial price which would be about $800 for the month for a COVID patient is extremely affordable especially when you consider hospitalization is $23,000.
Q: One final question. Most drugs when they’re successful, all the wanna-bes come in after a certain period of time and start making their generic drugs. How long are you protected before someone starts doing generic take-offs?
A: Based on our very successful data from BETonMACE 1, we got a patent extension due to some non-obvious findings, and we’re basically covered ‘til 2040.
And the main program under composition of matter without a synergistic benefit is covered all the way out to 2034. So we are well covered.
And as far as these new patent questions, whether a President like Biden can waive a patent, in this case therapeutics were not included in that discussion, so we don’t have a problem with that.
But also I don’t have a problem in general.
If there are areas like India that need a social benefit, give them a social benefit. It’s that simple.
Gilead’s done a very good job of that with the Hepatitis program and Hep C. And I think that’s a stellar example of social responsibility, and they’ve done exceptionally well financially as well.
Paul: Well that’s about it for me. Sophy do you have anything else that you want to ask here? Do you have any other questions that have come in?
Sophy: Just briefly, Don, if you could just touch on the recent financings.
Don: Yes, we have been doing a private placement that went far over what we expected or needed. And we also had further support through debenture from our lead financers out of Shenzhen. And we’ve got a lot of activity on the go right now. I wish I could share more, but I can’t just yet.
Sophy: We’ll ensure that our participants today keep a look out and we’ll be sharing your news with them as well. We look very forward to seeing the developments that you’re going to be going through over the next few weeks or months.
Don: I’d like to tell them once more go rattle your politician’s chain a little bit. Those guys have their hands full and I wouldn’t want their jobs right now. But whether it’s Kenney or Legault or Ford any of them I wouldn’t want it. But keep reminding them. The more they hear it the better. The faster things will move.
Paul: Well Don, thank you very much. It’s a phenomenal story. I mean I hope you have as much success as you possibly can to get rid of this virus and everything get back to normal.
Thank you everyone for participating today. We had a great crowd. Any further questions submit them to Sophy or I and we’ll forward them to Don and we’ll make sure they get answered. Again, thank you very much for your time Don. Appreciate it very much.
Don: Thank you Paul and Sophy. Appreciate it.
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