Resverlogix Corp. (RVX) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the Annual and Special Meeting of the shareholders of Resverlogix Corp. [Operator Instructions]. Following the formal business of the meeting, a corporate update presentation will be provided with an archived version posted to the company's event web page as soon as it becomes available. I would now like to turn the conference over to Donald McCaffrey, President, CEO and Chairman of the Board of Resverlogix Corp. Please go ahead, Mr. McCaffrey.

Thank you very much. And good afternoon, and welcome to the annual and Special Meeting of Resverlogix Corp.. The meeting will now come to order. My name is Don McCaffrey. I'm Chairman, President and CEO of Resverlogix. It's my pleasure to Chair this meeting. The company has organized a live webcast of the meeting, whereby shareholders can listen to the meeting online, as this is not a virtual AGM, shareholders cannot vote or ask questions as part of the meeting unless a ballot is required. I ask that when a vote is requested, shareholders present in person do so by a show of hands. In order to ensure that the meeting covers the required business in the efficient manner, we have prearranged with designated shareholders or proxy holders as the case may be, to move the second -- to move and second the motions of business. Upon conclusion of the formal part of the meeting, management will provide a report on the company's activities. After the presentation, members of management will answer questions submitted in advance to the meeting. Thank you. Now with your approval, I shall ask Lloyd McLellan of Borden Ladner Gervais to act as Secretary of the meeting; and Stephanie Tuss as -- of Computershare to act as the Scrutineer. So Computershare has provided me with a declaration as to the meeting indicating that shares of record on November 2, 2020, were mailed a copy -- shareholders were mailed a copy of the notice of meeting and information circular, together with a company form of proxy. And I direct a copy of the declaration as to be -- as to the mailing to be kept by the secretary with the records of this meeting. Now we move to the quorum and voting procedures. I have received the scrutineer's report, and the total number of common shares represented by shareholders present in person and by proxy at this meeting are 62 shareholders, representing 136,666,391 common shares or 58.15% of shares eligible to vote in the meeting. The shareholders present or represented by proxy at the meeting constitute a quorum for the purpose of this meeting. I now declare the meeting regularly constituted for the transaction of business. With your approval, I recommend that the reading of the minutes from the prior Annual Meeting of Shareholders held on October 31, 2019, be dispensed with. If there are no objections, we shall proceed. Anyone wishing to review these minutes should contact the company's Chief Financial Officer. The first item of business is to table the audited financial statements of the company for the year ended April 30, 2020, together with the report of the auditors and the unaudited financial statements of the corporation for the interim period ended July 31, 2020. A copy of the year-end financial statements and MD&A have been mailed to the registered shareholders and beneficial shareholders who responded to the mail list request form. A copy of the July 31, 2020, interim financial statements and MD&A have been mailed to the shareholders who responded to the mail list request form. Now the next item of business is to fix the number of directors to be elected at the meeting at 6 members. I would now ask someone to make the motion in this regard.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

All those in favor, please signify by raising your hand. [Voting]

Opposed, if any? [Voting]

None. I declare the motion carried. Thank you. The next item of business is the election of directors, and I declare the meeting open for nominations.

Mr. Chairman, I nominate Don McCaffrey, Norma Biln, Shawn Lu, Kelly McNeill, Dicky To, and Kenneth Zuerblis for election as directors of the company.

Are there any other nominations? [Voting]

If anyone's opposed to close the nominations? [Voting]

Seeing none, I declare the nominations closed.

Mr. Chairman, I move that the persons nominated as directors of the company be individually elected as directors for the ensuing year.

Mr. Chairman, I second the motion.

All those in favor of individually electing the nominees as directors of the company, as forsaid, please signify by raising your hand. [Voting]

Thank you. I declare that I, Don McCaffrey, Norma Biln, Shawn Lu, Kelly McNeill, Dicky To and Ken Zuerblis are the duly elected directors of the company, each to hold office until the next annual meeting or until their successor is elected or appointed, unless their office is earlier vacated in accordance with the company's bylaws. Now we will proceed with the appointment of the auditors. I'll ask someone to move that KPMG LLP Chartered Professional Accountants be appointed as auditors of the company until the next annual meeting of shareholders. As such remuneration as may be fixed by the Board of Directors and that the directors be and are hereby authorized to fix such remuneration.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

All those in favor, please signify by raising your hand. [Voting]

I declare the motion carried. The next item of business is the approval of the ordinary resolution approving an amendment to the corporation's bylaw #2 to allow for shareholder meetings to be held virtually using electronic means as more particularly set forth on Page 7 of the management information circular.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

All those in favor, please signify by raising your hand. [Voting]

Opposed, if any? [Voting]

Seeing none, I declare the motion carried. All right. The next item of business is the approval of the ordinary resolution approving a private placement of 10,560,000 units in the corporation at a price of $1.25 per unit, each unit being comprised of 1 common share and 1 common purchase warrant exercisable at a price of $1.50 per share for a period of 9 months from closing as more particularly set forth on Pages 7 and 9 -- 7 through 9 in the management information circular.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

All those in favor, please signify by raising your hand. [Voting]

Opposed, if any? [Voting]

Seeing none, I declare the motion carried. If there's no further business, may have a motion to terminate this meeting.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. You have heard the motion, all those in favor, please signify by raising your hand. [Voting]

Opposed if any? [Voting]

Seeing none, I declare the motion carried. This annual and special meeting of the shareholders of Resverlogix is terminated. I will now proceed with the management presentation. First, I will have a drink of water. Okay. Thank you, everybody, for attending today. We would have done this version anyway because of COVID, but in typical fashion for Resverlogix's AGM, we have a major snowstorm here in Calgary. At my home, we got between 18 to 24 inches of snow overnight. So it's a little tricky even getting here for this presentation. But a pleasure to be here. Slide #2, we have a forward-looking statement as usual. And Slide #3, just a bit of a review for some of the people on the line who may be new. As you know, we're a Canadian company with a cardiovascular drug called apabetalone and we're a pioneer in the area of epigenetics, that is where we have the ability to turn disease-causing genes on or off. We had the extreme pleasure of receiving the FDA breakthrough therapy designation in February. It's the highest designation other than drug approval that a company can get. And at the time, we were 1 of only 130 drugs to ever be awarded this and the first mainstream cardiovascular drug ever to get such an award. So a lot of this is based on the uniqueness of our drug. We've tested in 4,200 man years of treatment, and it has demonstrated positive biological effects on patients, in disease areas, such as cardiovascular disease, diabetes, chronic kidney disease, nonalcoholic fatty liver disease, vascular dementia, pulmonary arterial hypertension and soon to be COVID-19. Now on that, I'm sure most of you have seen today's news announcement from Resverlogix about our work in COVID-19. And I'll just recap this a little bit. Back in March, 23 to be precise, a group of 22 global universities working in a Manhattan Project style approach to eradicate COVID studied 20,000 drugs and published on 63 of them. We were 1 of those 63. So since that time, we've been doing a lot of work. We've shown up on a few other short list as well. 1 out of a European university group. I believe it was October, and we were on the short list of 4 on that one. So during all this period of time, we had very diligently move forward into studying COVID. But as you know, that's not something we can study in our own labs. There's a certain level we can get to. And then the final work, especially in human cells, has to be done in a BL3 -- BLC3 laboratory, which we do not have. So we had to line up with everybody else, like the hydroxychloroquines and remdesivirs and all the others that were being tested, and there was a lot of them. So in the fall, we finally got -- about August, we finally got into a few labs, 3 of them. And the results have been spectacular. We do not highlight the results in today's news release for a very, very specific reason. And it is work of other parties that is not published yet. It will be published, and it is -- I have reviewed the data, and I can tell you, I am very pleased with what I saw. We had set a certain bar that we had hoped to establish, and I can say we far exceeded it. And the timing of receiving that data is pretty good because there's another publication that came out. I think it's only in -- it's not even in print yet. It doesn't go to final print until January 5. This is just online, so it is public. Proceedings of the National Academy of Science of the United States, and it is directly involving BET inhibitors as targeting the transcription regulators of what you see on the title is SARS-CoV-2. That's actually the real scientific name of COVID-19. We try to put them both on in brackets or not, just so on 1 hand, we're performing properly for the scientific community. And on the other hand, we're not confusing the heck out of our investors. So their chatter and their work that they've done in there is showing some very important stuff. Really, what's going on with COVID-19 is, it's attaching to human cells by utilizing BRD4. Now remember, we're a BRD4 inhibitor. So reducing BRD4 is a good thing. But after it's attached, it actually uses a human receptor or 2, 1 of them is called ACE2 and another TMPRSS2, they'll have some cute name for that soon, I'm sure. But especially with ACE2 and some of the others, we have a huge reduction in those as they are inflammatory type of markers that are turned on. And this is why a lot of the really sick patients or the people who die are people who have events of other kinds already, diabetes, chronic kidney disease, heart disease, pulmonary diseases. And their ACE2 inhibitors are highly turned on. Our publication with American Heart last month showed those are the exact type of inflammation markers we turn way down, more than 90%. And so very encouraging, very exciting and a lot of logic as to why this is working with our drug because our drug does stuff, no other drugs do. So on Slide 5, this is an interesting slide that was sent to me last month. It came out on CNN, and if you see the big dots are cancer, and these are deaths per year in 100,000s. Cancer is 612, heart disease, 670. And this came out -- must have been right around the U.S. General Election because it's showing 250,000 in the U.S. alone for COVID. Unfortunately, that number is now over 300 and by the time we get into a full year of COVID, it may actually even match cancer and heart disease. So it's not the worst killer, but why it's such a problem is because our health system is geared for the existing diseases like cancer and heart disease. When you add a whole new gamut like COVID, it's problematic, very problematic. And our health staff and people in hospital facilities, which I have 3 daughters in that position, it's very difficult on them and everybody around them. Now Slide 6, the near-term events and planning. So we do have our FDA designation. That does not have a time limit on it. I guess it originally did, there was a time limit of having your first meeting with them, which that was done with us in June. Went quite well. We have a great group of people we're working with, they're codesigning the program. And the way it's been laid out is the FDA has set it up. So we have the possibility of having an interim analysis at halfway point in showing that the drug works, that could be as early as 2022. We give no guarantees there, but that's pretty exciting for us that, that is a possibility. And all or most of the BETonMACE2 patients will be receiving again top standard of care as our fantastic results we got in BETonMACE 1 were enough to get us breakthrough therapy. We're very -- and that's on top of standard of care. So the FDA is very aware that this drug has the potential to have a huge impact on the area we're working in, cardiovascular, diabetes and chronic kidney disease or the metabolic diseases. So although COVID is catching up as a killer, metabolic disease is already there. So we really look forward to knocking some of that down. We've talked quite a bit in the last while about partnering options. It is going extremely well, except for the part about COVID-19. When everything went crazy again here this fall, it has slowed down mainly for the reason of clinical trial launch. And we can't launch a clinical trial of this size in the middle of a pandemic. We can launch COVID-19 trials. You can launch small oncology trials, but this type of trial, it's very difficult. So things have to calm down somewhat. And it's been interesting because it's given us time to get more people caught up and involved in the partnering process. It is getting pretty busy. I can tell you, over the last month, it has been exceptionally busy with us preparing and working and presenting to multiple pharmas in different types of approach. Some of them are looking at huge trials that would cost up to $150 million. Of course, in all of these, we are negotiating that the partner will pay for that trial. Some of them have quicker, more clever, faster type of designs that could be done that would come in -- half of that, maybe $60 million. So it's given us opportunity to really work hard and get this right. Also at the same time, some of these groups have opened up some of their internal services to us. One case I can think of is the CMC or the chemistry, been able to help us with their standard and review and really work and upgrade that at no cost, and we're not committed to working with that group. So very helpful. We're not just sitting around. A lot has been done here, designing and moving forward on the faster trials that we can like COVID and really making sure we get the right partner that best suits what the investors and shareholders and the stakeholders in the company really need to see. And that's expediency and finance covered by others. So the early COVID trial could start as early as Q1. And those are small and fast trials and unfortunately, there's no shortage of patients right now. So we would be able to proceed on that. And the patients in those -- in that trial will only be on drug for about 2 weeks. So we should be able to get some very solid data by Q2. And the pulmonary arterial hypertension trial that started a long time ago, and it stopped because of COVID in both Québec and Alberta. And it restarted in Québec, I believe it's still restarted, but I think it's about to shut down with Québec again this week. Alberta's shut down still. So it is a cumulative type of technology we're doing there. So eventually, that data will be compiled to a point that the trial will be deemed complete. But again, that 1 is highly dependent on COVID because as you can imagine, pulmonary and COVID go hand-in-hand, there's not a lot of extra workers and space in those particular units. They're the ones that are jammed full. Okay. Now to the -- where we are in the process here, so the requirements for a successful drug launch are listed here on Slide 7. One second, please. Thank you. So we really, we look at efficacy, safety, regulatory approvability, mechanism of action, publications, where is the science we're looking at this and strategic commercial pathway. We have all of this in place now. So this is why so many pharmas are talking to us in so many different directions, different indications, different sizes, et cetera. It's good because this has really been proven out. It works. We know that. And I'll show you that on the next slide here on Slide 8. This is 1 of our better efficacy slides showing that in our BETonMACE 1, the patient's reduction in death, heart attacks and congestive heart failure was 63%. This is above and beyond the top standard of care. And the p-value here of 0.0002. But that means is there's only a 2 in 10,000 chance this data is inaccurate. So this type of data that sold the FDA on breakthrough therapy designation, and we applaud them for moving that forward. Slide 9 is a copy of that designation. And it includes all of the different titles you'll hear in certain FDA designations like fast track, well that's included in breakthrough, et cetera. There's tax breaks. You can register the trial much faster at NDA, much shorter reviews. You can do it at the interim analysis of the BETonMACE trial. So we're really working on that, as you'll see in the next few slides. One of the areas that we're going to enhance in that trial is chronic kidney disease. This is data that was presented by the Head of Nephrology at UC Irvine, Dr. Kam Kalantar-Zadeh. In October, he presented this at one of their top U.S. nephrology conferences. And it really shows a strong, strong difference between placebo patients with CKD and apabetalone patients with CKD being chronic kidney disease in the below 60 range, below 60 is when you're considered to have CKD. And that would be Stage 1, then you go 2, 3, 4. And by the time you get down to a GFR of 15 or lower, you're going on to dialysis. But these poor nephrologists, they don't really have any drugs to give these patients. It's just kind of managing through the system, trying to make them comfortable and slow it down as much as they can. So this type of drug certainly got the eye of the nephrology community. And for us, it's very important, as you see on the next slide because the patient enrichment strategy, the more -- or sorry, the sicker the patients are, the more effect our drug has on them because we're turning off those inflammation markers that are being turned on by COVID and by diseases like chronic kidney disease, diabetes and cardiovascular diseases. So in BETonMACE2, we want even more CKD patients. So in this case, we're going to have about 20% higher risk factor, which really helps on the number of events you're going to get. So these are the annual MACE events. This is going to be about 20% higher than the BETonMACE population. So to accumulate 600 events in the BETonMACE2 trial, it's going to move a lot faster, which should be quite beneficent. Okay. We also greatly understand our mechanism of action. Our in-house team has published almost monthly on this, some months 2 publications. So this is 1 of the positive side effects of COVID. Normally, we're busy running around and traveling to conferences here and there and everywhere and distracted with lots of work here in the lab and stuff. Now everybody is at home, and has plenty of time to write papers. So we're getting some very good publications out. It's a complete treat to see acknowledgment from others now like the proceedings of the National Scientific or -- American scientific group there in today's announcement. It's almost weekly now where major publications are coming out on BET inhibition and its importance. And don't forget, we are at least 8 years ahead of anybody in this. There's no shortcut. There's nobody going to show up out of the bushes that all of a sudden, me too, we're it. So it's pretty exciting with all that COVID data and with our cardiovascular data. Our cardiovascular metabolic program is our lead program. It always will be our lead program, but, boy, is it exciting to have the option of helping out. Being 1 of the, hopefully, helpful drugs moving forward in COVID world. Now I mentioned publications. This is as of last May, and there's probably another 100, maybe 200 since then because so much attention has been given to BET inhibition because of COVID. There's tons of papers. But when you see almost 5,000% increases in publication over a 10-year span, that tells you, you have a very active area. So to hold that 10-year lead and to have near-term benefits from that. We've all waited a long time to have those near-term benefits right around the corner is pretty exciting. It certainly is for me. Then safety. Another 1 of the markers of things we have to get right to make sure we have a proper launch. Safety has been very good. We have the breakthrough therapy designation. Mainly was reviewed for the safety. So that's -- getting endorsement basically from the FDA on your safety and your technology, boy, that's a pretty exciting event. If it didn't happen, right, smack in the middle of the launching and lockdowns of COVID-19, it probably would have had a much more significant positive impact. But we don't doubt for a second, that will come shortly. Okay. And the strategic pathway. We know where this drug works. We can start with smaller population groups like are listed here. And it's not so small. You got 8 million patients that are listed here. In orphan indications we have 25,000 patients around the world. So this is a truly broad program that has very exciting global opportunity. And for us, it's the design and picking the right partner, which of these gets to the market fastest because we're going to do them all. But in what order, is it going to be best for our investors and stakeholders in this company and who's stepping up to that, it's exciting to be in these meetings. I'm actually having a lot of fun again. So it's good times. Now the additional indications, we still have all these to work on above and beyond the main categories on the previous slide. But the pulmonary arterial hypertension, that is in progress now. And officially now so is COVID. So we're taking this seriously, moving it forward as fast as we can in the areas that we think will have the most advancement, especially in our new COVID world. Okay. Intellectual property, this just continues to add good news on slide, I believe it's 18 here. It's growing. We added a couple more just 2 months ago or I guess really 1.5 months ago here with the SGLT2 combinations, the DDP-4s. These are really important because in the U.S., our main patent for composition of matter extends into 2034. With this kind of addition around the world, this can take our patents out to 2039, 2040, in that range. So really nice healthy patent extension, and that helps when you're dealing with major pharmaceutical companies. We are dealing with companies that own some of these SGLT2s. And what an SGLT2 is it's a new type of drug for diabetes. They've been very successful. And this particular market is expected by 2025 to reach $25 billion a year in sales, then along comes our drug, and it makes them work 63% better. That's exciting. So that's -- and having the longer intellectual property protection is very helpful. Now on Slide 19. These are some of the milestones from the year. It's been a crazy year, to say the least in everybody's life. We all know that. But we started by highlighting that these diabetes drugs that we're working with had huge impact. And then we introduced that to the FDA, breakthrough therapy designation, and we were awarded that. In March, we were able to -- the publication I mentioned at the beginning on March 23 with the 22 universities. Highlighting us, out of 20,000 drugs, highlighting us as 1 of the top 63 potential. So that really shone a light on a direction we should be spending a lot of time on, and we did. In March, that was published in JAMA as well. So that's a pretty big journal. In June, we had our clinical COVID program launch. We also had our CKD meeting, the ERA-EDTA. That's a mouthful, but that's a very, very big kidney disease conference in Europe. And of course, yes, this year, it was virtual, like everybody else, but huge response off of that because those doctors, as I mentioned, they don't have anything for their patients. So this is this is a real plus for them to see this research going in this direction. The FDA confirmed the key aspects of our BETonMACE2 program. In August, we started getting some more financing. In October, we raised -- converted entire $12 million debt plus the interest. So that was a phenomenal help to the company. Real pleasure to have that in the rearview mirror. October, again, major publications on COVID-19. That was the European one. In November, we filed the extra intellectual property. And in December, we've been putting together the launch plans for the COVID-19, and that will have its first patient in Q1 of 2021. So it will move quite fast as well. So we're excited, and everything is moving forward. And the last slide is really the management team. And as you'll see, everybody is doing well and working hard and we'll go to Q&A now, and there's, I think, a question on that anyway, so I'll address that.

Thank you very much. I'm going to have a drink of water, and then I'll move right into the Q&A. I'll just read out some of the questions and answers and we didn't screen them too much. We combined some of them. A lot of the suggested questions have just been covered now in the management presentation here. Okay. So first question, what is the status of the BETonMACE2 given FDA breakthrough therapy designation for apabetalone? Can you review all available options to move the program forward as well as expected timing? I think I covered that in the management slide presentation, but I'll touch on it just a little bit more. I mean it's dynamic right now. We -- in these type of trials, you try to -- this trial will probably have about 200 different sites, many of them in Europe and the United States, in South America and in China. And those are the very areas, with the exception of China, oddly enough. Those are the very areas that are being absolutely pounded by COVID-19 right now. So we, like everybody else, especially in the larger trial structure, we just have to wait. And we're excited. We're ready to go. We're beefing up the chemistry. We have options of switching to a fixed-dose combination or potentially -- that's after the trial -- or potentially a tablet form pill taken once-a-day with a time release or staying as is and doing the chemistry in parallel. And a lot of that affects cost and timing and length of the trial. So we're trying to do it in the most efficient way that meets the approval standards of the FDA and of our potential new partners. Okay. Can you provide -- question number 2, can you provide any updates on the October 6 news release announcing the $13 million private placement or other financing options as well as timing? Okay. The answer really is stay tuned. We have just voted on this particular aspect. We will -- after the meeting today, we will release the votes, and there will be a later update on that, but I can't comment before market close. And I think we've touched on where we're going with that. We are moving forward. And we have several options of financing going forward as well. And again, as a public company, we can't touch on those here. But we do have the options of upfront money from our potential partners who will be paying for the clinical trials and/or working with our royalty position that's often done and having those funds pay for the trial and/or the existing shareholders are also an option, especially the major shareholders. And as you've seen with the commitment from some of our more recent ones in taking out the debt position. We have a very good working relationship, and we have very good major partner shareholders in this company right now. Okay. Third question is, what is the status of the COVID-19 program? I think I've answered that in today's news release and then some update. I'm really excited about that one. More so because I'm sick and tired of hanging out at my house. And we're all in the same boat. And if we can have a therapeutic that is added to the extra quiver in the arsenal of moving forward against COVID-19, I would be very glad to help out. Scientific data behind this really seems to say we're there. And so very exciting. The fourth question is, how is the company and its personnel coping with COVID-19? We had a bunch of these. And one of the questions was, have we made any cuts to staffing? The answer to that one is no. We are very loyal to our people. We have phenomenal staff. They are hard-working and have done an enormous amount of work from home. The lab staff come in and rotate on schedules, alternate days, half days. So there's only 2 maximum 3 people in the entire 20,000 square foot facility here. So they're well protected. They have the option of staying home if they do not feel comfortable. So we're following all of the rules and more. We're -- remember, we're a high-tech lab that is used to dealing with toxins and different material like this. So these people are all trained in that. This isn't anything new to them. It's -- but we are following restrictions. We have had outbreaks in this building that we're in and have adapted as required but so far, so good. Everything in this area. We follow the physical distancing and rotating schedules and all of this. So it is important to stick to it. For the staff who are listening, thank you. Okay. I have another question. Had we had to slow or stop any programs? And the answer is yes. Those programs that are involved in large clinical trials have slowed. We haven't stopped any programs, but there's things we would probably be doing more of if COVID wasn't around because the partnering and everything else would be complete. But with that dragging a little bit with COVID, that's all right. We've got plenty to do, as I mentioned, in writing publications and doing partnering due diligence. That is actually a lot of work, especially when you're doing multiple. Okay. The last question that was on the list here is, is the company still pursuing an additional public listing on a U.S. exchange? The answer there is we are not pursuing a listing on a U.S. stock exchange at this time. And as discussed on this call, we currently have several ongoing positive developments that enable us to move our program forward as well as working on this COVID program. So I don't think we're missing out on anything there right now. The markets are pretty good in life sciences, but overall, not so good. So -- but for us, I would say we are swamped right now doing what we're doing. So we're trying to create value and management and board believe what we're doing right now is the best thing to do. When that switches, we will go back and look at the U.S. exchange. We have kept in touch with all of our contacts down there pretty much monthly and our friends at Rothschild. So we can do that when the time is right. And we can do it quite quickly. Okay. Thank you again for attending the presentation, and I'd like to wish everyone a happy holiday season. And stay safe, wear a ask and take a vaccine as soon as you can. Thank you very much. Take care.