Emerging Drug Developer: Resverlogix

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Resverlogix lays it all on the line in 2010

Early in 2007, Resverlogix CEO Don McCaffrey turned up at a BIO investor forum to talk up some ongoing buyout discussions. As we noted at the time, its lead therapy, RVX-208, was a promising 'good cholesterol' drug that analysts were enthusiastic about, even though the company hadn't reached the clinic yet.

That deal never got done in 2007, 2008 or so far this year. But that doesn't mean that the small Canadian biotech company (RVX) has been sitting still. And McCaffrey is just as bullish about the company's deal-making prospects now that his lead therapy has progressed to the threshold of two crucial mid-stage trials.

"The whole approach even two-and-a-half years ago was to option a deal to a pharma company that would be predicated on pricing the deal on post-ultrasound data in Phase II," says the CEO.

If you take any other sector in biotechnology, he adds, especially areas like oncology, a robust Phase III is needed to obtain the full value of a development program. In the cardiovascular area he's working on--the plumbing side, as he puts it--mid-stage ultrasound data showing plaque removal is the ideal inflection point.

And Resverlogix is moving much closer to that goal post. Early next year Resverlogix will launch two parallel mid-stage trials of its lead therapy. Its future will ride on the outcomes.

"It's going very well," asserts McCaffrey. "A lot of the pharmas we're dealing with are quite interested. What we've been doing in our negotiations is sit down with them and work out net present value of what they feel the technology would be worth assuming successful data." It is, he adds, a "fairly significant" sum of money.

McCaffrey has good reason to stay focused on the big prize. When Resverlogix unveiled positive early-stage data on its main program for RVX-208 in late September, Simos Simeonidis, an analyst at Rodman and Renshaw in New York, bullishly projected that the therapy has the potential to be a multibillion-dollar earner--if it is approved.

Significantly, Phase Ib/IIa trial data demonstrated that RVX-208 increased the level of plasma ApoA-I-'good' cholesterol--which protects the body against atherosclerosis and cardiovascular disease.

For a small biotech company like Resverlogix, that's a potent validation.

"Someone can go forward with an option deal and they can lock it up," says the CEO. Or they can wait. "We plan to finish Phase II and if the data is successful we will have, I'm sure, several offers."

In one upcoming intravascular ultrasound (IVUS) trial, researchers will examine early lipid effects and atheroma plaque characterization of the coronary vessel wall, dosing 40 patients with the therapy while 20 will get a placebo. A second dose ranging trial will recruit 240 patients who will be given one of three or four doses. Sometime before Christmas of 2010, says the CEO, the company will obtain a very clear picture of the drug's potential.

Resverlogix has almost all of its eggs in this one basket. But there's nothing odd about that in the high-risk, high-reward school of drug development.

"We all face that prospect," says McCaffrey. "It's not unique to us."

The developer has 26 full-time workers and about 20 full-time equivalents working in contract organizations.

"We're increasing," notes McCaffrey. "We will be adding starting in March, expanding the inflammation program and hiring on the R&D side."