Zacks Small Cap Research – RVPH: Full Year 2023 Results – Technologist

By John Vandermosten, CFA

NASDAQ:RVPH

READ THE FULL RVPH RESEARCH REPORT

2023 Financial and Operational Results

On April 15th, 2024, Reviva Pharmaceutical Holdings, Inc. (NASDAQ:RVPH) reported full-year 2023 financial and operational results and filed its Form 10-K with the SEC. Since the company’s previous financial update in November, the company raised $30 million to fund the RECOVER II trial, and participated in several investor and scientific events including a key opinion leader (KOL) presentation in February. The RECOVER II trial is now expected to begin before the end of the second quarter and management has provided guidance for several anticipated milestones.

Highlights for 2023 and to date:

➢ Multiple parallel studies in support of schizophrenia program completed – March 2023

➢ Company added to Russell Microcap index – June 2023

➢ RECOVER topline results reported – October 2023

➢ $30 million capital raise – November 2023

➢ KOL Event – February 2024

➢ Poster at American Society for Clinical Pharmacology & Therapeutics (ASCPT) Meeting – March 2024

➢ Poster at Schizophrenia International Research Society (SIRS) Meeting – April 2024

Reviva generated no revenues for 2023 and expended ($39.5) million on operational activities, producing a net loss of ($39.3) million or ($1.65) on a per share basis. For the year ending December 31, 2023 and versus the same prior year period:

➢ Research & development expense totaled $31.4 million, up 66% from $18.9 million in the comparable period, primarily attributed to higher Phase III clinical trial expenses and drug development costs, and increases in stock-based compensation and salary;

➢ General & administrative expenses totaled $8.1 million, rising 51% from $5.4 million on account of greater stock-based compensation, legal expenses, recruiting expenses and consultant and professional expenses;

➢ Other income included a greater loss from remeasurement of warrant liabilities offset by a larger increase in interest and other income due to higher interest rates on greater cash balances;

➢ Provision for taxes was $17,000 down from $21,000 related to payment of state and foreign taxes;

➢ Net loss was ($39.3) million vs ($24.3) million, or ($1.65) and ($1.25) per share, respectively.

At year end 2023, Reviva held $23.4 million in cash on its balance sheet. 2023 cash burn was ($28.3) million and cash flows from financing were $33.2 million. Following the end of the quarter, Reviva entered into a small financing agreement to pay for its directors’ and officers’ policy.

RECOVER-2

Reviva is planning to launch its confirmatory Phase III RECOVER-2 trial in 2Q:24. The trial will have a similar design to the RECOVER trial with a few notable differences. We expect that the second Phase III trial will be able to enroll at a faster pace than the first as much of the ground work has already been completed and the trial managers are experienced. The confirmatory trial will measure endpoints over a 4-week period and will randomize 450 patients 1:1:1 with 30 mg (in place of 15 mg), 50 mg and placebo arms. Completion is expected in early 2025. This primes Reviva to submit its new drug application (NDA) in 2H:25.

On January 9th, the company entered into a start-up agreement with an additional contract research organization to conduct the RECOVER-2 trial. $1.1 million was paid to the group to start its activities.

An April 15th press release announced that Reviva had come to an agreement with the FDA regarding the content desired in a new drug application (NDA). The agency wants to see two positive Phase III studies showing efficacy at week 4 that are accompanied by safety data of at least 12 months. It will require a long-term randomized withdrawal study post-approval to support maintenance of effect. Reviva expects to have completed all of the NDA submission requirements by 3Q:25.

Reviva Video Series

Reviva Pharmaceuticals Holdings, Inc.’s (NASDAQ:RVPH) CEO Laxminarayan Bhat participated in a video series which covered several topics germane to the company. This included reviewing the most recent key opinion leader (KOL) event, elaborating on the unmet needs in schizophrenia, summarizing the results of the RECOVER trial, looking ahead to the RECOVER 2 trial and evaluating recent merger and acquisition activity in the CNS space. Follow the links below to access the interviews.

➢ Reviva Pharmaceuticals RECOVER Trial Findings

➢ RECOVER Trial Results

➢ RECOVER Trial Additional Findings

➢ What’s Going on with M&A in CNS?

➢ Unmet Needs in Schizophrenia

➢ Reviva’s Upcoming RECOVER 2 Trial

➢ Key Opinion Leader Event

➢ Reviva Pharmaceuticals CEO Fireside Chat

Meta-Analysis Comparison with RECOVER Data

Reviva commissioned a study in 2024 to update this analysis for data provided in the RECOVER trial. RECOVER data was announced in October 2023 promulgating the results from 411 patients with acute schizophrenia. Patients in the trial were randomized into placebo, 15 mg and 50 mg groups, respectively enrolling 137, 140 and 134 patients. The comparative analysis standardized the data in Huhn et al. along the dimensions of efficacy and side effects and applied the same methodology as used in the 2021 analysis to the RECOVER data and new addition lumateperone (Caplyta) which was approved in 2019. The updated results from RECOVER were placed in a scatter plot along with the meta-analysis data from Huhn. On the x axis is a measure for side effects, where lower is better and on the y axis is efficacy, where higher is better. The optimal region on the scatter plot is in the Northwest corner which is associated with an effective antipsychotic producing low side effects. In the following image we share a graphical comparison provided in Yu, 2024¹.

As shown in the exhibit, Reviva’s brilaroxazine inhabits the furthest position in the Northwest or upper left corner of the scatter plot demonstrating both better efficacy and a better side effect profile versus the other data points. This position suggests that brilaroxazine provides the best balance of efficacy and side effects which should translate into substantial penetration into the schizophrenia market if the product is approved.

Milestones

➢ Initiation of Phase III RECOVER-2 clinical trial – 2Q:24

➢ Completion of RECOVER trial open label extension – 4Q:24

➢ Completion of RECOVER-2 clinical trial – 2Q:25

➢ New Drug Application (NDA) submission to FDA – 3Q:25

Company Pipeline

Summary

As we stand on the precipice of the RECOVER-2 launch, Reviva has continued to perform additional analysis of its first Phase III study and share these results with stakeholders. The company has also laid out a number of anticipated milestones for completion of the ongoing trials and regulatory submissions. One of the more compelling analyses of brilaroxazine was the comparision of the drug’s safety and efficacy against other antipsychotics in the space. The favorable balance of these two elements makes a strong argument for uptake by payors and providers assuming the product is approved.

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