Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Biotech’s Lead Drug Candidate Targets 'Market with Huge Potential'
Research Report

Share on Stocktwits


A ROTH Capital Partners report outlines its reasons for initiating coverage on this epigenetic therapeutics developer, whose lead candidate is in trials in diabetes, end-stage renal disease and other indications.

In an Oct. 29 research note, analyst Jotin Marango reported ROTH Capital Partners has initiated coverage on Resverlogix Corp. (RVX:TSX) with a Buy rating and a CA$10 per share price target. The stock is currently trading at CA$3.22 per share.

The investment banking firm likes Resverlogix for its lead epigenetic candidate, apabetalone (RVX-208), which is an inhibitor of bromodomain proteins (BET).

A primary advantage of apabetalone is that it is being developed for non-acute indications that need chronic treatment versus relapsed/refractory oncology indications. Currently, in the BETonMACE trial, it is being evaluated in patients with type 2 diabetes patients who have low high-density lipoprotein and are at risk for cardiovascular disease. Next year, Resverlogix intends to advance apabetalone into a Phase 2 trial in end-stage renal disease and into other studies, for indications including Fabry disease, vascular dementia and pulmonary arterial hypertension.

Among other epigenetic candidates, apabetalone stands out and is furthest along in the clinic, noted Marango. Now in Phase 3 with BETonMACE, it "drives a positive risk/reward." The data readout for this study, expected in Q1/19, would be "pivotal" for Resverlogix and epigenetics at large.

The analyst indicated apabetalone's primary differentiators. First is its molecular selectivity among BET inhibitors. It is a "BD2-selective BRD4 inhibitor, which we believe underlies its differentiated transcriptional and biologic profiles," Marango explained.

Second, apabetalone has a superior safety profile. It has not demonstrated any of the usual toxicities of other BET inhibitors or epigenetic agents. This has allowed Resverlogix to continue advancing the drug clinically.

Third, apabetalone is positioned in a market with huge potential, specifically high-risk diabetes, followed by chronic kidney disease, as opposed to an orphan indication or oncology. "We project peak sales of $1 billion-plus in a target population. . .although we see good likelihood of label extension into adjacent indications and compounded value thereafter," wrote Marango.

He added that apabetalone shows similarities to "the recent coup of Amarin's Vascepa, including novel/fringe mechanism, ambitious end market and pivotal win-triggered mergers and acquisitions theses."


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Disclosures from ROTH Capital Partners, Resverlogix Corp., Company Note, October 29, 2018

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

Want to read more about Biotechnology / Pharmaceuticals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe