The results of RegenerX’s phase clinical trials pursuant to dry are in and the company passed with flying colors. Its ARISE-2 trial investigated RGN-259’s safety and efficacy pursuant to the signs and sympton of dry eye over 600 patients:
“The ARISE-2 study, which was conducted together with Ora, Inc., demonstrated a number of statistically significant improvements in both signs and symptoms of dry eye syndrome with 0.1% RGN-259 versus placebo, while showing excellent safety, comfort, and tolerability profiles. The ocular discomfort symptom showed a statistically significant reduction in the RGN-259-treated group at day 15 as compared to placebo (p=0.0149) in the change from baseline. For sign, RGN-259 also improved the dry eye patient’s ability to withstand an exacerbated condition in a patient subgroup with both compromised corneal fluorescein staining and Schirmer’s test at baseline. In this population, RGN-259 showed superiority over placebo in reducing corneal fluorescein staining in the change from baseline at days 15 and 29 (p=0.0207 and 0.0254, respectively). RGN-259 confirmed its global effects on dry eye syndrome and fast onset in multiple sign and symptom efficacies with no safety issues in the ARISE-1 and ARISE-2 studies as well as in the pooled data, although ARISE-2 was not successful in duplicating the results of ARISE-1 where the study population was limited and less diversified.”
RegenerX and ReGenTree – the company’s JV partner – will likely look to partner with another company to help fund its operations eventurally bring RGN-259 to market. The stock was off over 30% in mid-day trading on the potential dilution from having to raise additional equity.
In Q2 2017 it generated revenue of $13 thousand, but suffered operating losses of $303 thousand. For the first six months of 2017 its cash from operations was -$541 thousand. At the end of Q2 cash on hand was $243 thousand, down from $1.6 million in the year earlier period. It trades at $0.30 per share and has a market capitalization of less than $35 million.
The $1.8 Billion Dry Eye Market
About 30 million people are effected by dry eye. Allergan has dominated the market for decades, and currently charges $5,000 annually for Restasis. Restasis ceded some market share to Shire’s (SHPG) Xiidra after it entered the market in the second half of 2016. However, Xiidra’s presence might not have improved pricing or market conditions. Xiidra is also priced at $5,000 so Shire and Allergan are likely fighting over the 1 million people already with a prescription.
Restasis controls about 70% of the $1.8 billion dry eye market, while Xiidra controls over 20%. However, only Xiidra is approved to treat the signs and symptoms of dry eye. RegenerX’s arrival could give it a leg up on both companies in terms of efficacy:
RegeneRx believes RGN-259 compares favorably to dry-eye competitors. At a recent investor conference RegeneRx implied RGN-259 [i] showed better efficacy than Restasis and [ii] reported no burning or stinging or diysgeusia (foul taste in mouth), unlike Xiidra
RGN-259 could be devastating to Allergan. Restasis represents 9% of total revenue and 15% of EBITDA. Restasis’ revenue has been in decline as Xiidra has taken market share. Meanwhile, Allergan’s growth is dead; the only way to grow revenue is through acquisitions. That could be problematic going forward since the company is highly-indebted. It could be imprudent to is $28 billion debt to acquire more companies at the height of the market. Shocking The Street, a premium service in conjunction with Seeking Alpha, estimates Allergan will eventually be downgraded by Moody’s or S&P, and that includes Restasis.
In my opinion, Allergan’s dismal growth prospects makes its 13x EBITDA multiple untenable. It sold its Restasis patents to the St. Regis Mohawks in order to fight off a patent challenge from Mylan and Teva. The ploy has backfired so far and its stock is off over 20% since the desperate act. On an inter partes review (“IPR”) stands in the way of generics competitors entering the market. The question then becomes, “How long would it take generics rivals to garner FDA approval and actual come to market?” Some analysts are modeling generic Restasis in 2018. Others assume a launch of 2019.
RegenerX’s clinical trial success will likely pave the way for another competitor with better efficacy than Restasis. RGN-259’s arrival will likely cause Allergan’s stock to free fall and make a ratings downgrade a near certainty.
Trump And The Global Economy – October 24, 2017
We had our second installment of Trump And The Global Economy town hall in October. Professor Lance Brofman, Coconut Rob, Wuyi Jacobs (AfroBeats Radio) and Shock Exchange, author of Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead chopped it up with hundreds of members of the Brooklyn community. The town hall is designed to give the public real information about Trump’s policies on taxes, immigration, the economy, the stock market, etc. and how they will impact the country and the community.
You guessed it, drug makers like Valeant, Celgene, Mallinckrodt, Insys, Depomed, and Allergan were the topic. We explained everything from these companies’ price-gouging to tax avoidance to insolvency to contributing to the opioid epidemic. The video is below.
