Resverlogix’s lucrative moment in the spotlight

“As big as Lipitor” - It was most probably this statement from an analyst, part of an article last week on cardiovascular drug RVX-208, that caused originator Resverlogix to achieve the impressive feat of increasing its share price by 66% in the space of two days.

But while the statement and ensuing interest in the group is also certain in retrospect to have left the management team in the small Calgary-based biotech rubbing their hands in glee, the expectation that the drug, which has only just entered larger phase II trials, might equal the achievements of the world’s biggest-selling drug seems at best very premature.

Given the very early stage of the drug and the relatively limited data that has been produced so far, a phase Ib/IIa trial involving 72 people, a tugging on the reins might be a sensible move just now. Additionally, as the mighty Lipitor has generated over $108bn in sales for Pfizer since its launch in 1997 and is forecast to add another $21bn before it goes off patent in November 2011, it is hard to imagine another drug coming anywhere near this feat.

Whoa Dobbin!

In fact, Resverlogix was initially so surprised by the share price reaction following the article, published by Bloomberg, they had to issue a statement saying that they did not know why the shares had rocketed other than on the back of the report, which included a quote from an analyst working for the only bank that covers the company, Rodman and Renshaw, which has previously acted as its broker.

But perhaps another ingredient that may have sparked the investor frenzy in the company, along side the bullish single analyst coverage, is that Roger Newton, the man who discovered Lipitor, is on Resverlogix’s scientific advisory board.

Some deceleration has, however, been provided by investors who having ridden the wave of publicity have been taking profits over the last few days. But the shares were up 8% again today in early trade to C$6.30, indicating that there are still some hoping there is more to come despite the stock almost tripling since the start of the year.

Interesting approach

Admittedly the premise that RVX-208 is based on is a promising one. The drug has been designed to increase the artery cleaning process, by boosting the levels of cardioproactive HDL, or so called “good” cholesterol, by increasing the production of ApoA-I, an important player in the reverse cholesterol transport process that the body uses to remove fat deposits from artery walls.

Normal statins work by lowering LDL or “bad” cholestorol, so in theory the drug could be used in combination with existing statins.

In September, data from the phase Ib/IIa trial showed an increase in ApoA-I levels in all participants, but it should be remembered that significance was surprisingly shown in the lower dose. 

Pushing on

The next steps in the development of the drug that should really have been the trigger for the excitement around RVX-208 are the two phase II trials that the group has initiated. 

The first trial is a 13-week, dose ranging study in 280 patients with stable cardiovascular disease and aims to look at the levels of ApoA1 and good cholesterol in the blood. The second trial is a more interesting 13-week, intravascular ultrasound study that is set to measure the drug’s ability to remove or stop plaque buildup on artery walls.

But such is the expectation or even hype around RVX-208 that even the start of these trials has caused interest because cardiac heavy hitter Steven Nissen has associated himself with the studies, indicating to some in the market that RVX-208 definitely has a big future.

However, it is worth remembering that almost 60% of drugs fail in phase II. Also, given the results might not read out until the start of 2011 the shares are likely to drift in the meantime, as RVX-208 is the only product the group has in clinical trials.

That is unless the publicity surrounding the group flushes out a partner for the product, or even a sale of the company to a big player in the cardiovascular space, such as Pfizer or Merck & Co, willing to take an early punt on the drug. While this might have seemed unlikely even a few months ago, the hype around Resverlogix might make this become a reality.

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