Resverlogix Corp. to spin out RVX Therapeutics Inc.

CALGARY, Alberta—In a transaction designed to enhance shareholder value by unlocking the value of its epigenetics platform, Resverlogix Corp. has announced that its board of directors approved a proposal to spin out the company's subsidiary, RVX Therapeutics Inc.

 

RVX Therapeuticswill exclude Apolipoprotein A-1 ("Apo A-1") and RVX-208 technologies and will concentrate on leveraging its epigenetics platformso that it can focus on innovative drug research anddevelopment for multiple therapeutic indications such asautoimmune diseases and cancer.

 

Resverlogix will continue to focus on the clinical development ofRVX-208, its small molecule for the treatment of atherosclerosisthrough therapeutic increases in Apo A-1. In addition, Resverlogix willcontinue with its RVX-208-related clinical trial for diabetes and thesoon-to-launch Alzheimer's disease clinical trial. 

 

The spin out is to be implemented by way of a court-approved plan of arrangement that would then will be subjectto, among other things, final board approval and ashareholder vote. The company anticipates that the directors and senior officers of RVXTherapeutics will continue to consist of current directors and seniorofficers of Resverlogix.

 

According to the company, this decision to spin out RVX Therapeutics reflects the belief of the board of directors andmanagement that "it is in the best interests of shareholders tocreate a future value for its epigenetics platform and to provide amechanism for the retention of possible future royalties on RVX-208sales, depending on the deal structure finally negotiated."

 

"Based on the belief that the RVX-208 program currently accounts for theentire market value of Resverlogix and that the value of theepigenetics platform is unrealized, the spinning out of RVXTherapeutics will facilitate a corporate structure that is more likelyto reflect an accurate valuation of the epigenetics platform," the company notes. Thus, the objective of the spin out is to split the clinical RVX-208 program(Resverlogix) from the epigenetics platform (RVX Therapeutics).

 

Indoing so, distinct corporate environments will be created that help ensure Resverlogix is structurally ready for acquisition, while RVXTherapeutics' future value could be realized through a licensing and/orpartnering business model.This has the potential to unlock the future value for RVX Therapeuticsvia research and development of the epigenetic mechanism, the company notes, andestablishes a potential royalty stream from RVX-208. Theoretically, enhanced long-termshareholder value would be provided through direct valuations related to anyfuture licensing and partnering deals.In addition, the new structure is intended to minimize future dilutions shouldeither corporation require additional equity capital.