The deal structure involves CAD$50 million in equity investments, and future
China sales milestones and
licensing royalties that could represent in excess of US$400 million
CALGARY, April 27, 2015 /CNW/ - Resverlogix Corp.
("Resverlogix" or the "Company") (TSX: RVX) today announced that it
has entered into a Framework Agreement which sets forth the
principal business terms for an equity investment and a license of
RVX-208, for all indications, to Shenzhen Hepalink Pharmaceutical
Co., Ltd. ("Hepalink") for China,
Hong Kong, Taiwan and Macau (the "Territories"). The completion of
the transaction remains subject to execution of a definitive stock
purchase agreement and license agreement.
Under the terms of the transaction, Hepalink will subscribe for
13,270,000 Resverlogix common shares and 1,000,000 common share
purchase warrants, for aggregate proceeds of approximately
CAD$35 million, or CAD$2.67 per unit. Each warrant is exercisable
into one common share at CAD$2.67 per
share for a period of five years. After giving effect to the
transaction, Hepalink will hold approximately 12.69% of
Resverlogix's common shares. The common shares and warrants issued
to Hepalink will be subject to a three year lock-up period.
Hepalink will also be entitled to nominate one mutually agreed
representative for election to the board of directors of the
Company.
In addition, subject to completion of the Hepalink transaction,
Eastern Capital Limited ("Eastern") will purchase 5,600,000
common shares and 422,005 common share purchase warrants for
aggregate consideration of approximately CAD$15 million, or CAD$2.67 per unit. Therefore, total equity
investment by Hepalink and Eastern exceeds CAD$50 million. Eastern holds 14,965,307 shares
of Resverlogix which represents 17.46% of the 85,699,287 common
shares outstanding before giving effect to any outstanding
warrants. Eastern currently holds 7,578,232 common share purchase
warrants of Resverlogix. Assuming all warrants are exercised before
giving effect to the transaction, Eastern will hold approximately
24.17% of the common shares outstanding. After giving effect to the
transaction, assuming all warrants held by Eastern are exercised,
Eastern would hold 28,565,544 common shares of Resverlogix
representing 25.38% of Resverlogix's issued and outstanding common
shares based on shares outstanding as at today's date.
The subscription for common shares and warrants by Eastern is a
related party transaction within the meaning of applicable Canadian
securities laws as Eastern is an insider of the Company. The
transaction is exempt from the formal valuation and minority
approval requirements applicable to related party transactions on
the basis that the value of the transaction insofar as it involves
related parties is less than 25 percent of the Company's market
capitalization.
Under the license between Resverlogix and Hepalink, should
RVX-208 reach certain annual sales milestones ranging from 500
million renminbi ("RMB") to RMB 10
billion, Resverlogix is eligible to receive sales-based
milestone payments from Hepalink, each ranging from US$5 million to US$90 million. In addition,
Hepalink shall pay royalties based on net sales. Total sales based
milestones and royalty payments are estimated in excess of
US$400 million. The license shall
expire on a region-by-region basis on the later of the
15th anniversary of the first commercial sale in such
region or the expiry date of the last-to-expire of any licensed
patent.
Hepalink will be responsible for all clinical and development
costs in the Territories, including a patient population that will
be included in Resverlogix's planned Phase 3 BETonMACE trial.
Resverlogix intends to use the net proceeds to fund its: (i)
research and development activities (alone or through strategic
collaboration) including clinical development (including clinical
trials and the clinical development of our product candidates),
non-clinical development, research, discovery, chemistry and
regulatory costs; (ii) repayment of outstanding indebtedness and/or
payment of interest thereon; and (iii) general and administrative
expenses, capital expenditures, working capital needs and other
general corporate purposes.
Under the agreement between Resverlogix and Hepalink, Hepalink's
price shall be the manufacturing cost plus 10%. Resverlogix also
granted Hepalink an option to manufacture and supply products
comprising RVX-208 outside the Territories. Resverlogix's price
will be the manufacturing cost plus 10%. Resverlogix has the right
to select a qualified third party to manufacture RVX-208 outside
the Territories if Hepalink fails to meet the industry standards
required.
The closing of the transaction will also be subject to, among
other things, execution of definitive agreements, customary closing
conditions for a transaction of this nature, shareholder approval
of the majority of the votes cast by the shareholders of
Resverlogix (excluding Eastern in certain circumstances) at a
special meeting of the shareholders of Resverlogix, approval of the
Toronto Stock Exchange and other regulatory approvals. The
Framework Agreement requires that definitive agreements be executed
by July 26, 2015, failing which the
Framework Agreement will automatically terminate. The transaction
is anticipated to close in June 2015.
Resverlogix has agreed not to enter into negotiations with third
parties with regards to the grant of license of RVX-208 in the
Territories for three months.
About RVX-208
RVX-208 is a first-in-class, small molecule selective BET
bromodomain inhibitor. BET bromodomain inhibition is an epigenetic
mechanism that can turn disease-causing genes off, returning them
to a healthier state. RVX-208 is the first and only BET inhibitor
selective for BRD4-BD2, producing a nexus of biological effects
with potentially important benefits for patients with diseases such
as cardiovascular disease (CVD), diabetes mellitus (DM),
Alzheimer's disease, peripheral artery disease, and chronic kidney
disease while maintaining an excellent safety profile. Resverlogix
is planning to study RVX-208 in a proposed Phase 3 clinical trial
in CVD patients with DM and low HDL.
About Resverlogix
Resverlogix Corp. is developing RVX-208, a first-in-class, small
molecule selective BET bromodomain inhibitor for the potential
treatment of patients with cardiovascular disease, diabetes
mellitus, Alzheimer's disease, peripheral artery disease, and
chronic kidney disease. RVX-208 is the only selective BET
bromodomain inhibitor in clinical trials. Resverlogix's common
shares trade on the Toronto Stock Exchange (TSX: RVX). For further
information please visit www.resverlogix.com. We can be followed on
our blog at http://www.resverlogix.com/blog and via Twitter
https://twitter.com/resverlogix_rvx @Resverlogix_RVX.
About Shenzhen Hepalink
Shenzhen Hepalink Pharmaceutical Co., Ltd. is a global
pharmaceutical leader in manufacturing and development of
Heparin Sodium API to international pharmaceutical
companies such as Sanofi-Aventis, Fresenius Kabi and Novartis.
Heparin is widely used as an important anticoagulant therapeutic
agent in high-risk cardiovascular disease patients around the
world. Hepalink is listed on the Shenzhen Stock Exchange.
Hepalink has created a proprietary process for dealing with
impurities and composition separation and activity release
technologies in the production of Heparin Sodium API. Hepalink has
established a comprehensive quality management system in line with
China GMP standards and the US and European cGMP standards and
regulations. Hepalink is approved by the U.S. FDA and EU regulatory
authorities, and is also one of the primary participants in the
revision of the USP pharmacopeia standards. For more information,
please visit www.hepalink.com.
This news release may contain certain forward-looking
information as defined under applicable Canadian securities
legislation, that are not based on historical fact, including
without limitation statements containing the words "believes",
"anticipates", "plans", "intends", "will", "should", "expects",
"continue", "estimate", "forecasts" and other similar expressions.
In particular, this news release includes forward looking
information relating to the terms and conditions of the proposed
equity financing and license agreement, the Company entering into
definitive agreements relating to the proposed transaction and the
timing of the completion of the transaction, potential future
milestone payments and royalty payments to be received by the
Company, the use of proceeds of the financing, Phase 3 clinical
trials planned by the Company, research and development activities
and the potential role of RVX-208 in the treatment of
cardiovascular disease, Alzheimer's disease, peripheral artery
disease and chronic kidney disease. There is no certainty that the
proposed transaction will be completed on the terms described
herein or at all. Our actual results, events or developments could
be materially different from those expressed or implied by these
forward-looking statements. We can give no assurance that any of
the events or expectations will occur or be realized. By their
nature, forward-looking statements are subject to numerous
assumptions and risk factors including those discussed in our
Annual Information Form and most recent MD&A which are
incorporated herein by reference and are available through SEDAR
at www.sedar.com. The forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement and are made as of the date hereof. The
Company disclaims any intention and has no obligation or
responsibility, except as required by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
For further information, please contact:
Company
Contacts:
Donald J.
McCaffrey
President and
CEO
Resverlogix
Corp.
Phone:
403-254-9252
Email:
don@resverlogix.com
Sarah Zapotichny
Director, Investor Relations & Corporate Communications
Resverlogix Corp.
Phone: 403-254-9252
Email: sarah@resverlogix.com
Media:
Tony Russo, Ph.D.
Matt Middleman, M.D.
Russo Partners, LLC
Phone: 212 845 4251
Phone: 212-845-4272
Email: tony.russo@russopartnersllc.com
Email: matt.middleman@russopartnersllc.com
SOURCE Resverlogix Corp.