AAA Resverlogix gets $29m from Shenzhen Hepalink agreement

Resverlogix gets $29m from Shenzhen Hepalink agreement

Canada-based biopharmaceutical company Resverlogix signed a framework licensing agreement with pharmaceutical company Shenzhen Hepalink Pharmaceutical on Monday that included C$35m ($29.1m) in equity funding.

Dependent on sales milestones and royalty payments, the deal could eventually be worth more than $400m. Hepalink made the equity investment in the form of a common share purchase.

The deal also includes a $12.4m equity investment by Eastern Capital, an investment vehicle for businessman Kenneth Dart, which is subject to the Hepalink investment closing. The investment would give Eastern Capital, which already holds nearly 17.5% of Resverlogix, a stake of approximately 25.4%.

Hepalink will license RVX-208, a small molecule that acts as a selective BET bromodomain inhibitor, meaning the molecule is able to turn off genes that cause conditions such as cardiovascular disease, diabetes, Alzheimer’s, peripheral artery disease and chronic kidney disease.

Resverlogix will be eligible for milestone payments between $5m and $90m, once Hepalink’s annual sales of the drug reach RMB 500m ($80m) and until they reach $1.6bn. Hepalink will gain the licensing rights to commercialise the drug across Taiwan, Macau and China, including Hong Kong.

The agreement will expire 15 years after the first sale. Resverlogix will be responsible for a Phase 3 clinical trial for RVX-208, and will use the equity funding to support research and development, the repayment of outstanding debts and general expenses.

The deal is subject to approval by shareholders and regulators, which must be gained by end of July 2015 or the agreement will expire.

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