CEO Donald McCaffrey told BioWorld that Resverlogix Corp.'s unpaid loan of $68.8 million is "something we don't want, and our shareholders don't want it, and we are very pleased to have that circumstance on the way out."

And so it will be, as a result of the $87 million in gross proceeds gained by the Alberta, Calgary-based firm via the private placement of about 60 million equity units to Shenzhen Hepalink Pharmaceutical Co. Ltd. at $1.44 each. The deal was done under Canada's "financial hardship" provision, exempting Resverlogix from shareholder approval, given the company's immediate need and the delay that would be caused by a meeting.

Proceeds will be used mainly to repay the loan, which matures on Dec. 26, 2017, with the rest devoted to corporate purposes, including the phase III BETonMACE trial. That experiment is testing apabetalone, also known as RVX-208, in high-risk cardiovascular (CV) disease patients (the MACE part of the study's name is an acronym for "major adverse cardiac events"). In June, the study completed a fourth planned safety review and the monitoring committee recommended that work continue as planned without any modifications.

Apabetalone is a small-molecule bromodomain and extra-terminal (BET) inhibitor, the first and only such compound that is selective for the second bromodomain within the BET protein called BRD4, the company said. Apabetalone being tried in CV risk patients with type 2 diabetes and low high-density lipoprotein. "There are others working with this mechanism, such as Glaxosmithkline plc, Roche, and Gilead," McCaffrey said. "However, they are in oncology only." The BET bromodomain system contains "12 overall targets and their compounds hit all 12," unlike apabetalone. "They see a lot of issues such as thrombocytopenia and gastrointestinal stem cell tract lining, which is OK in an oncology program – oncologists deal with thrombocytopenia by breakfast every day," he said. "That's no big deal, but in a chronic program such as CV or diabetes or chronic kidney disease, clearly that would be unacceptable."

The phase III trial is enrolling 2,400 patients, with topline data expected in about a year. Recently, the FDA gave its go-ahead for Resverlogix to enroll patients in the U.S. "We're just lining up [the centers] now, going through the ethics committees and setting up the central labs," McCaffrey said, adding that the company is "only about 400 patients away from being fully enrolled. We've done quite well."

Globally in the top seven markets, the patients potentially eligible for apabetalone number around 10 million. "They really have nothing out there [as a treatment]," McCaffrey said. "We have some pretty solid people on our clinical steering committees, including Henry Ginsberg, from Columbia University in New York. He ran the ACCORD [Action to Control Cardiovascular Risk in Diabetes] trial, which showed definitively for the first time that no matter how well you manage a diabetic patient's glucose, that patient will still die from CV disease at a rate of about 68 percent." Thus far, Resverlogix has been able to show, in the diabetic population of 199 patients in the last two trials, a relative risk reduction in MACE by 77 percent. "That is an enormous number," he said, and it's "above and beyond the top standard of care available," such as statins and beta blockers. (See BioWorld Today, June 9, 2008.)

'Very comfortable with where we are'

"If you compare the risk category to just general CV, such as [is shown by patients in] the anacetrapib trial that Merck just closed down yesterday, their rate for MACE events over a one-year period averaged 1.5 percent," McCaffrey said. "In the BETonMACE trial, we're averaging 11.7 percent. These people have all had a recent event, they are all diabetic, so they have a very inflamed system, and they all have low HDL, which accounts for about 70 percent of cardiac events." Earlier this year, Kenilworth, N.J.-based Merck & Co. Inc. disclosed results from the phase III REVEAL (Randomized EValuation of the Effects of Anacetrapib through Lipid modification) outcomes study of its cholesteryl ester transfer protein (CETP) inhibitor, which gave patients cause for encouragement. But last week Merck gave up on the compound. "Unfortunately, after comprehensive evaluation, we have concluded that the clinical profile for anacetrapib does not support regulatory filings," the company's president Roger Perlmutter said in statement. (See BioWorld Insight, July 24, 2017.)

In BETonMACE, "what we're looking for is 250 MACE events that are adjudicated by a third-party CV clinic in Scotland," McCaffrey said. "We're very encouraged with where this drug is headed." Also coming up are mid-stage trials with apabetalone in kidney dialysis patients and in Fabry disease. "These are much smaller, in the 30-patient range," he said.

In the Hepalink private placement, each unit is made of one common share and 0.082759 of a common share purchase warrant, the latter exercisable at a price of $1.64 per share for a period of four years from the closing of the offering, subject to a four-month hold period. Resverlogix in April 2015 inked a potential $400 million-plus licensing deal in China, Hong Kong, Taiwan, and Macau with Hepalink, of Shenzhen, China. The arrangement brought an equity investment that gave Hepalink about 12 percent of Resverlogix's shares in exchange for rights in all indications in the covered territories. Hepalink is subscribing for about 13.2 million shares and one million share-purchase warrants, for total proceeds to Resverlogix of about C$35 million (US$28.9 million), or C$2.67 per unit, each warrant exercisable into one common share at C$2.67 each for a period of five years. The shares and warrants were made subject to a three-year lockup, with Hepalink allowed to nominate one mutually agreed representative for Resverlogix's board. If apabetalone reaches annual sales milestones ranging from ¥500 million (US$80.4 million) to ¥10 billion, Resverlogix would get sales-based payments from Hepalink ranging from $5 million to $90 million, along with royalties. If all goals are met, the total payout could be more than $400 million. Subject to completion of the Hepalink deal, Eastern Capital Ltd. agreed to buy 5.6 million shares and about 422,000 share-purchase warrants for a total of about C$15 million, or C$2.67 per unit. (See BioWorld Today, April 28, 2015.)

Specifically, before the placement, Hepalink held about 14 million common shares and about 2.3 million common share purchase warrants of Resverlogix, or 12.74 percent of common shares outstanding before giving effect to any outstanding warrants, and 14.48 percent of the outstanding shares assuming Hepalink exercised the warrants. After the private placement, Resverlogix has a total of about 175 million shares issued and outstanding, with Hepalink holding about 75 million shares and about 7.3 million warrants, which represents 42.86 percent of the common shares outstanding before giving effect to any outstanding warrants and 45.16 percent of the outstanding common shares assuming Hepalink cashes in.

The placement also means that the equity interest of Eastern Capital Ltd., which is not participating in the transaction, will drop from 19.35 percent to 12.67 percent of outstanding common shares and that the equity interest of the remainder of shareholders of the company will go down from 67.91 percent to 44.47 percent of the outstanding shares.

"We're in pretty good shape [as a result of the Hepalink transaction], and we have other discussions ongoing on regional licensing and indication-licensing deals," McCaffrey said. "We're very comfortable with where we are."