In a Feb. 12 research report, Pantginis noted that Rexahn Pharmaceuticals Inc. (RNN:NYSE.MKT) entered into a collaboration and license agreement with Zhejiang Haichang Biotechnology Co. to develop its Akt-1 inhibitor, Archexin (RX-0201), as a hepatocellular carcinoma therapy (HCC). "We view this transaction positively," said Pantginis. "Overall, we are impressed with the terms that Rexahn achieved for a new formulation and indication that has not even gotten off the ground yet."
Archexin is one of the company's three assets driving H.C. Wainwright's clinical net present value model on Rexahn; RX-3117 and Supinoxin are the others. On the basis of that model, the analyst's price target on Buy-rated Rexahn reflects tenbagger potential, $19.50 per share price versus where the stock is currently trading, at around $1.90 per share.
According to the terms of the recent agreement, the China-based firm will develop a nanoliposomal formulation of Archexin using its QTsome technology and carry out preclinical and clinical activities through completion of a Phase 2a proof-of-concept clinical trial for the treatment of HCC. Haichang will fund all studies to that point.
Per the agreement, Haichang will retain the rights to Archexin in China. It is entitled to 70% of ad licensing fees and royalties paid by a third party, whereas Rexahn can get 30%. In markets outside of China, the terms are the opposite, 70% for Rexahn, 30% for Haichang.
Rexahn chose to halt further development of Archexin for metastatic renal cell carcinoma in light of new drugs, nivolumab, cabozantinib and lenvatinib, getting approved for the indication in the past two years.
Instead, the biotech plans to concentrate on advancing RX-3117 and Supinoxin. Revenue generated from the partnership with Haichang will fully fund RX-3117 through a Phase 2a study for an indication with a market of significant size. The deal also will provide "substantial upside potential with reduced risk to Rexahn."
In other news, updated data from Rexahn's Phase 2a trial of RX-3117 in refractory advanced bladder cancer were announced Friday at the American Society of Clinical Oncology's 2018 Genitourinary Cancers Symposium. Patients in the study received an average of 2.7 prior treatments, including 85% with gemcitabine and 67% with immunotherapy, Pantginis wrote.
Results indicate RX-3117 continues to show a favorable safety profile. "This is evidenced by the altering of the dosing regimen during the study, based on investigators' feedback, to switch from three weeks on, one week off, to continuous dosing," and no resulting changes in adverse events, indicated Pantginis.
As for efficacy of RX-3117 in this case, Pantginis noted that to date, 18 of the 21 evaluable patients have attained stable disease. Eight have been in the study for 69 or more days, one patient as long as 315 days. These data compare to the two months expected for progression-free survival in third-line treatment. "We view the activity observed with RX-3117 monotherapy as a third-line therapy encouraging and believe that it may have a more profound effect when combined with Abraxane in the front-line setting."
Rexahn has in progress a Phase 2a, combination RX-3117 and Abraxane study as a first-line treatment for pancreatic cancer. Also in pancreatic cancer, it has a Phase 2a study evaluating RX-3117 alone as a first-line treatment.
The next catalyst for Rexahn, anticipated in Q1/18, is the launch of a combination study of RX-3117 and cisplatin in first-line metastatic bladder cancer.
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Disclosures from H. C. Wainwright, Iovance Biotherapeutics Inc., Company Update, Feb. 12, 2018
I, Joseph Pantginis, Ph.D. and Pete Stavropoulos, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Rexahn Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of Jan. 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Rexahn Pharmaceuticals, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did receive compensation from Rexahn Pharmaceuticals, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Rexahn Pharmaceuticals, Inc. during the past 12 months.
The Firm does not make a market in Rexahn Pharmaceuticals, Inc. as of the date of this research report.