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Instructions] Following the formal business of the meeting, a corporate update presentation will be provided with an archived version posted to the company's event web page as soon as it becomes available.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.

Good afternoon, and welcome to the Annual and Special Meeting of Resverlogix Corp. The meeting will now come to order. My name is Donald McCaffrey, Chairman, President and CEO of Resverlogix, and I will chair today's meeting. The company has organized a live webcast of this 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 the show of hands. In order to ensure the meeting covers the required business in an efficient manner, we have prearranged with designated shareholders 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. Thank you. Okay. With your approval, I shall ask Lloyd McLellan of Borden Ladner Gervais to act as Secretary of the meeting; and Donald Santini of Computershare to act as the Scrutineer. Okay. Computershare has provided me with a declaration as to mailing indicating that shareholders of record on May 3, 2021, were mailed a copy of the Notice of the Meeting and the information circular, together with the accompanying form of proxy. And I direct a copy of this declaration as to mailing to be kept by the Secretary with the records of the meeting. Now we have received the Scrutineer's report. Thank you. The Scrutineer has provided me with a report that shows that the shareholders present or represented by proxy at the meeting constitute a quorum for purposes 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 of the prior Annual and Special Meeting of Shareholders held on December 22, 2020, be dispensed with. If there are no objections, we will 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 8 months ended December 31, 2020, together with the report of the auditors and the unaudited financial statements of the corporation for the interim period ended March 31, 2021. A copy of the December 31, 2020, 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 March 31, 2021, interim financial statements and MD&A have been mailed to the shareholders who responded to the mail list request form. Next item is to affix the number of directors. Next item of business is to elect, at the meeting, 6 members. I will now ask someone to make a 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]

Anybody opposed? [Voting]

I declare the motion carried. 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 Ken Zuerblis for election as Directors of the company.

Thank you. Are there any other nominations? Is anyone opposed to the close of the nominations? [Voting]

There are no further nominations, I declare 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 foresaid, 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. Okay. Thank you. 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 hands. [Voting]

I declare the motion carried. Okay. The next item of business is to consider, and if thought fit, approve with or without modification an ordinary resolution approving the unallocated options, rights and entitlements available under the corporation's security-based compensation plans as detailed in Pages 7 through 18 of the Management Information Circular. In order to be carried, the ordinary election must be passed by a majority of votes cast at the meeting. Could I have a motion to approve the ordinary resolution as set out on Page 18 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]

I declare the motion carried. Okay. Now we're -- is there -- if there's no other business, may I have a motion to terminate this meeting.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

You've heard the motion. All those in favor, please signify by raising your hand. [Voting]

Opposed, if any. [Voting]

I declare the motion carried. This Annual and Special Meeting of Shareholders of Resverlogix is terminated. I will now proceed with the management presentation. Thank you. Okay. We'll just get those slides loaded in a second here, and I'll commence right away. All right. So thank you for attending. As I'm sure everybody knows, this is technically a very short year for us because we realigned our year-end, which had some significant advantages for our highly overworked staff. Slide 2 is our forward-looking statement, and we stand by our comments and our forward look. So Slide 3 is just a brief glance at Resverlogix. 99% of people online will know what we are and what we do, but we are a very unique company, with epigenetic technology that is getting a lot of recognition as of late, and we will continue that upward trend. We were awarded the FDA Breakthrough Therapy Designation in 2020, and we've been advancing that quite nicely despite this horrific pandemic that we have been dealing through. And we do feel that we'll move fairly fast from this point because we do have 4,200 of man years treatment and safety results from this drug in cardiovascular disease, diabetes, chronic kidney disease, liver disease, vascular dementia, pulmonary arterial hypertension and very soon to be in COVID-19 patients. So on Slide 4, this is something that we're very proud of that only 2 months ago, we were awarded Health Canada approval to advance into COVID trials. And this is a very, very big step. We're pretty excited. And as you'll see shortly, we've been pretty busy behind the scenes on moving this forward. Now during these times, it is extremely important to get validation of what we're doing because everybody and their dog want to prove they have something that might work for COVID-19. And so to have our dual-mechanism approach of both dealing with the very deadly cytokine storms and the ACE2 expression where the virus actually enters the cell and starts its replication cycle. So to have both of those is quite fortuitous. And unless you're somebody like Donald Trump, who got screened every single day, an antiviral like remdesivir that he was taking doesn't help that much because by the time the damaging cytokine storm takes place, most of the virus is already dead and gone anyway. So it's the damage left behind, that's the killer and the problem. And a 39-page publication in Cell, the #1 biology and biochemistry publication out of 298 various ones, really confirm that for us. And yes, we would like to snap our fingers and make things happen immediately after that was published, but that's not the world we live in right now. We are working very well and very hard to move this forward. Now on Slide 6, this is a presentation slide that I showed in December of 2020 at our last AGM, only 6 short months ago. And we were showing the U.S. death tolls here in -- 250,000 deaths in -- by COVID at that time. As you see on Slide 7, we're already -- they're already over 600,000. So is it slowing down? Yes, it will slow down because of the vaccines. The vaccines are a very, very important part of the overall program. Reducing the number of people exposed is critical. The problem with this virus is it mutates so fast. And with any percentage of unvaccinated people, it is going to continue to be a problem despite what politicians might be telling you and think and probably believe. We haven't seen the end of this one. Okay. On Slide 8, I'd like to give you an update on where we are on the clinical trial launch. I think this is what a lot of people are most interested right now. Remember, like I said, we've only had approval for this program for 2 months. Clinical trials listed the trial start as June 12. But internally, a trial starts once you start spending money, and that was in April, 60 days ago. So a rapid response has been made in these 2 short months. We signed a very experienced CRO to handle this trial for us. They already have experience with 20 COVID trials under their belt. So they bring a lot of knowledge and expertise to the table with us. We've designed a proper and affordable program. We've revised it a little bit, cutting back some expenses on what are now deemed out there is unnecessary lab work and probably saved an extra $0.5 million doing that. So it slows you down maybe a week or 2 here and there. But our job is to get it right and get it as affordable program as possible. We've also arranged a backup plan in Brazil. As we all know, we're all experts on COVID now whether we like it or not. We all know that these bubbles shift and change around a lot. So if you're just working in Canada and you run through a slowdown, it could be 6 months before you have a proper patient base. I believe our results will encourage a lot of people to want to be in this trial. So we can't guarantee time frames. We can't tell you when things are going to happen in advance because they are not in our control. We certainly can tell you when they happen, and that's what we will be doing. But we do have Brazil all set up now as a backup -- well, it's not just a backup. It will be going in parallel. So as the waves of patients shift around, we feel we're well covered. We've also, in this short period of time, confirmed principal investigators. We have pending ethics approval reviews at various hospitals in Alberta, Ontario and Quebec, and the first full submission will be later this week. We were able to relabel the drug and transfer it from Europe, moving it around. So there's a lot of activity that was taking place behind the scenes. You don't just say, "Hey, we're in a trial. Let's dose somebody tomorrow." It doesn't work that way. All this has been done during a massive pandemic and with considerable competition. At year's end last year, I was telling you that there were 3,200 COVID-related trials ongoing. They're currently now 5,900. And yes, still the yogurt one is still in there. So there's a lot of distraction. There's a lot of stress on an already extremely stressed medical system. The doctors and staff are burnt out, many taking leave to recover. I've seen it personally. And after putting all of their life-saving efforts and incredible work that they do, watching politicians and non-vaxxers treat the reality as a joke, and it's very harmful to our medical staff and their well-being. So we need to rethink this in the future. Our dual-mechanism approach is being -- it's bringing great hope and expectation to these people. So we expect this to be a very positive result. And really, the dual mechanism of in the first place, trying to stop COVID from even getting into the cells through the ACE2 receptors and the PPH4, that's a very good opportunity for us. But being able to stop the cytokine storms and turn back the clock on that is exactly what was highlighted in the cell publication from the Australian group. It's a phenomenal publication, very helpful, and they were showing the reversal of the damage. So it's not just about COVID. It's about the damage in the cardiovascular, the pulmonary, the kidney and trying to correct some of that going forward is the unique approach that we have in the dual mechanism. So how are we going to do all this? We are still a very small company. We've enlisted a very experienced group in EVERSANA. So on Slide 9, you'll see the details of this group. They work all of these areas. These are areas that we have basically little to no experience in. So trying to roll this out on our own would be a bit of a slowdown and a hell of a learning experience. So we chose a path that minimizes financial exposure. It keeps our revenue base, and it maintains full ownership of the program going forward. So EVERSANA is an advanced company. They're purposely built to overcome external pressures and act as our commercializing engine. That's their business model. They excel at key needs like patient services, channel, field solutions, plus they bolster that with other critical solutions to complete what we need to fully commercialize our product. But there's -- but it's not just their infrastructure. It's the fact that they contractually commit to bold guarantees, guarantees that, frankly, others cannot make. They cover up to 50% of the cost and the risk, paid back only out of future sales, and not paid back if sales don't exist. 3.5% royalty is an upside for them on their side of North American sales. That's a deal I would do any day of the week. I think this is an incredibly positive business model for a Phase III company like ours. The structure is also designed that it has no encumbrance on future pharma deals. A low, reasonable buyout has been set that pharma wants to take over in the future, they can easily do it. So it is a marvelous system. On Slide 10, it shows -- or sorry. Slide 10, yes. It shows that we're just basically working with them and adding strength. They have 3,500 employees around the world working in 25 locations, working on over 150 brands right now, serving 80 countries. Our deal is for North America to start with, but this is an opening -- we speak to them almost every day. It's -- they're very excited. They view this as one of their top opportunities ever, and we happen to agree with them. It's the dual mechanism that has them quite impressed. And remember, these people are all from top 25 pharma companies, and they know what they're doing. So I think this was a brilliant move for the company to move forward and step in this way. Okay. Now we're going into the lead program which is also advancing. So on Slide 12, just a brief reminder that yes, we are working with the FDA. And we've mentioned in past presentations that as soon as COVID slowed down a little bit during the summer, we wanted to be ready to launch this particular program, full speed on BETonMACE2. And it is raring and ready to go. On Slide #13. This is still all based on the very solid efficacy data. The drug works. When you have a hazard reduction of p-value of 0.0002, that's pretty darn incredible. And moving forward, we also -- on following slide, the Kaplan-Meier curve for CKD, chronic kidney disease, with a 52% reduction in the hazard ratio, also phenomenal news. So there's a lot of publication data going on, on this now, especially in the kidney world. The publications that -- this has been going in the top publications in their field. These particular doctors really haven't had a lot to [ cheero ] over the last century as far as advancements in chronic kidney care. And I'm told that in the inner circles, this is being viewed as the biggest breakthrough and they're equating it to statins in the cardiovascular market when statins came through and the big difference that made in reduction of deaths and events by over 30%. So this is -- that's a nice comparison to have. We're working forward on that. So we have maintained that this will be a trial in around the 3,600 patient range, and this is on Slide 15. The global development plan has not changed in the last short little while. And we do anticipate this to be an approved trial at the interim analysis, which the FDA has agreed that that would be a registerable point for this trial. As far as financing of the trial, we've done an exceptional job of working on that. We have partners in China that are responsible contractually for their portion. We have full ability to get this done. And you'll hear about that over the coming months. Now the Resverlogix's 12-month key milestones. The first 6 on here because it's 12 months and we changed our year-end, pretty much we're well known. And the last 6, starting in March with that Cell Journal publication, you can't get a better endorsement out of scientists than that one. Well, actually, maybe you can. The FDA Breakthrough Therapy Designation is pretty equivalent. So having both of them, we know where we're headed. We want to go faster as well, but we've been dealing with the pandemic just like everybody else. So being able to move from Cell to get in April, Health Canada approval for apabetalone and COVID, very big step. Then in -- also in April, we had a very strong publication on pulmonary cells or lung cells with our friends from the -- I forget the -- Buffett Cancer Institute (sic) [ Fred & Pamela Buffett Cancer Center ]. It's not that Buffett, it's his cousin. And that's with University of Nebraska Medical Center. Very top-notch facility, especially in viral. They boast having one of the top Ebola researchers in the world in that facility. And he is actually a gentleman who worked on our program. So also in April, the Society -- American Society of Nephrology published a very positive kidney data. This is the one that is being likened to statins in the kidney world. So we're doing well. We're doing very well. And allowing us the time to structure these properly, finance them properly and move forward is exactly what it takes, and that's where we are. So in May, we also closed over $12 million in financing. And most people read about the $6 million part with Hepalink. However, there was other financing because we do not want to be reliant on the -- any government as far as financing this COVID trial or other work. We do believe those programs will be fully financed but we're ready to go. We're ready to go now. So in June, well, we just talked about EVERSANA, that is a critical deal. EVERSANA have used this as a $0.25 billion deal over a 10-year period, they'll be working with us as partners, and we like it. So it's been a wonderful group to work with. And because of them and my staff's very hard work, you'll be hearing a lot of announcements as they happen. We won't be speculating on when things are going to happen during a pandemic, so we will announce them when they happen. And they are moving along quite fast. So on that note, I would like to thank you very much for spending some time with us this afternoon. And allowing us to update you a little bit on where we are. And you will hear from us soon. Thank you very much.

This concludes today's presentation. Thank you for participating, and have a pleasant day.