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RVPH: Brilaroxazine: Multi-receptor Modulator on Deck

01/19/2021

By John Vandermosten

NASDAQ:RVPH

READ THE PREVIOUS RVPH RESEARCH REPORT

Initiating Coverage

We are initiating coverage of Reviva Pharmaceutical Holdings, Inc. (NASDAQ:RVPH) with a current valuation of $21.00 per share. This present value is based on our estimates for successful Phase III trials in schizophrenia and subsequent approval by the FDA of Brilaroxazine (RP5063). We anticipate that the required trials will be complete by 2024 and receive regulatory approval in the US by 2025. In parallel with regulatory submission in the US, we also see similar efforts in other selected geographies.

Schizophrenia

Reviva’s lead indication targets schizophrenia, a serious mental disorder characterized by the subject suffering hallucinations, delusions and disordered thinking and behavior that impairs normal function. Between 0.25% to 1% of the global population suffers from schizophrenia. The World Health Organization estimates there to be 20 million persons with the chronic disorder.

Clinical Pipeline

Reviva plans Phase II work in several indications associated with schizophrenia including bipolar disorder, depression, ADHD and psychosis related to neurodegenerative disease. Two orphan conditions may also be pursued in pulmonary arterial hypertension and idiopathic pulmonary fibrosis. These indications are amenable to RP5063’s mechanism of action which relies on various states of binding to and modulation of multiple serotonin, dopamine and nicotinic receptors where it has antagonist and partial agonist activity.

Exhibit I – Reviva Drug Pipeline (1)

The Unmet Need

There are numerous antipsychotics approved for use; however, a high discontinuation rate due to suboptimal efficacy and serious side effects reveals an unmet need. Commonly prescribed antipsychotics leave many patients suffering from neuroleptic, endocrine and metabolic side effects that frequently lead to discontinuation. These therapies do not provide efficacy uniformly across the spectrum of symptoms. Many of these agents are prescribed at a lower than medically needed level in order to limit the severity of side effects but fail to provide a therapeutic effect at that dose leading patients to discontinue therapy.

Brilaroxazine (RP5063)

Brilaroxazine, or RP5063, is a novel, multimodal serotonin, dopamine & nicotinic receptors modulator with an improved efficacy & side effect profile compared to other antipsychotics. The agent provides a better balance of receptor activity that may allow for therapeutic doses to be used in difficult to treat patients while limiting the impact of the common neurological, metabolic and endocrine side effects associated with commonly prescribed agents.

Exhibit II – Multimodal Modulator of Serotonin and Dopamine Receptors (2)

Reviva will soon launch registrational studies addressing acute and maintenance treatment for schizophrenia that will be completed over the next few years. Pivotal studies are expected to be complete by 2024, after which a new drug application (NDA) will be filed in the United States and other geographies. Assuming customary review periods, approval is anticipated in 2025 followed by near immediate commercialization in the United States and following a short delay in other areas. Pricing is forecast to be in line with other newly launched branded antipsychotics and penetration is modeled to be in the low single digit range of the addressable market. If the drug profile is better than expected, we anticipate higher penetration levels to occur.

Reviva will soon launch registrational studies addressing acute and maintenance treatment for schizophrenia that will be completed over the next few years. Pivotal studies are expected to be complete by 2024, after which a new drug application (NDA) will be filed in the United States and other geographies. Assuming customary review periods, approval is anticipated in 2025 followed by near immediate commercialization in the United States and following a short delay in other areas. Pricing is forecast to be in line with other newly launched branded antipsychotics and penetration is modeled to be in the low single digit range of the addressable market. If the drug profile is better than expected, we anticipate higher penetration levels to occur.

We anticipate that pivotal data will be available for the schizophrenia indication by 2024 followed shortly after by a new drug application (NDA) to the FDA and other regulatory agencies. Approval in the US and other regions is anticipated in 2025 and 2026 respectively followed by commercial launch. If successful Brilaroxazine will address several shortcomings of approved schizophrenia treatments and expand the therapeutic armamentarium for this chronic and debilitating mental disorder.

Reviva: Financial Positioning

As of December 2020, Reviva holds approximately $9 million in cash and will target the raise of additional funds to support its development projects. The once private firm combined with the special purpose acquisition company Tenzing Acquisition Corp. on December 14, 2020. The merger is expected to provide the capital necessary to advance its development programs. With no debt on balance sheet and a capital raise planned for the near term, we expect Reviva to launch the first of its schizophrenia programs in mid-2021 which include two $20 million Phase III trials, one $25 million maintenance study and a $10 million safety study.

Key reasons to own Reviva Pharmaceuticals shares:

‣ RP5063 Phase III asset may address an unmet need in schizophrenia and other mental disorders vs. existing therapies

◦ Greater degree of efficacy

◦ Lower level of side effects

◦ Improved discontinuation rate

◦ Addresses negative symptoms

◦ Improved social functioning

◦ Opportunity for approval in multiple mental disorders

◦ Faster onset of action vs. standard of care

◦ Binding to multiple serotonin and dopamine receptors implicated in schizophrenia

‣ Additional RP5063 Phase II ready programs in multiple indications

◦ Bipolar Disorder

◦ Depression

◦ Attention Deficit Hyperactivity Disorder (ADHD)

◦ Alzheimer’s Psychosis/Behavior

◦ Parkinson’s Psychosis

◦ Pulmonary Arterial Hypertension (Group 1)

◦ Idiopathic Pulmonary Fibrosis

‣ RP1208 preclinical programs in development

◦ Depression

◦ Obesity

‣ Potential for intellectual property protection until 2037 for RP5063

In our initiation, we review Reviva’s lead indication in schizophrenia, the structure behind RP5063 and compare it with other products on the market recognized to treat the condition. Our review of schizophrenia is presented along with discussion of the disease’s pathophysiology, prevalence, treatment and risk factors. We report on relevant preclinical and clinical data, trial design and development history for RP5063 in schizophrenia and provide a summary of other treatments for the condition. The report also explores RP5063’s secondary indications and the pre-clinical work being done with RP1208. We expect first sales of RP5063 in 2025 following a successful trial outcome, submission of an NDA and regulatory approval. Following an in-depth discussion of our model assumptions, we provide an appraisal of Reviva and generate a valuation of $21.00 per share. RP5063 may address an unmet need for patients with schizophrenia and other mental disorders, providing a safer and more effective treatment than what is now available.

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1. Source: January 2021 Reviva Pharmaceuticals Corporate Presentation

2. Source: January 2021 Reviva Pharmaceuticals Corporate Presentation

 
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