The board of directors of Resverlogix Corp., a Calgary-based biopharmaceuticals company, has approved a proposal to spin out subsidiary RVX Therapeutics Inc. through an arrangement whereby investors receive one share in each of the two companies. The transaction is intended to give RVX Therapeutics the opportunity to fully leverage its epigenetics platform. Resverlogix has been backed by venture capital firms, including New York-based NGN Capital, since 2009.
Resverlogix Corp. (TSX:RVX) (“Resverlogix”) today announced that its Board of Directors has approved a proposal to spin-out its subsidiary, RVX Therapeutics Inc. (“RVX Therapeutics”), which will focus on innovative drug research and development by leveraging its epigenetics platform. RVX Therapeutics will exclude Apolipoprotein A-1 (“Apo A-1”) and RVX-208 technologies, rather focusing on multiple therapeutic indications including autoimmune diseases and cancer.
The spin-out is to be implemented by way of a court-approved Plan of Arrangement (“the Arrangement”) pursuant to the Business Corporations Act (Alberta). The implementation of the Arrangement will be subject to, among other things, final board approval of the Arrangement and a shareholder vote.
The spin-out of RVX Therapeutics reflects the Board of Director’s and management’s belief that it is in the best interests of shareholders to create a future value for its epigenetics platform and to provide a mechanism for the retention of possible future royalties on RVX-208 sales, depending on the deal structure finally negotiated.
Based on the belief that the RVX-208 program currently accounts for the entire market value of Resverlogix and that the value of the epigenetics platform is unrealized, the spinning out of RVX Therapeutics will facilitate a corporate structure that is more likely to reflect an accurate valuation of the epigenetics platform.
The objective of the spin-out is to split the clinical RVX-208 program (Resverlogix) from the epigenetics platform (RVX Therapeutics). In doing so, this process will create distinct corporate environments such that Resverlogix is structurally ready for acquisition while RVX Therapeutics’ future value could be realized through a licensing and/or partnering business model.
This has the potential to unlock the future value for RVX Therapeutics via research and development of the epigenetic mechanism and establishes a potential royalty stream from RVX-208. Enhanced long-term shareholder value is provided through direct valuations related to any future licensing and partnering deals.
In addition, the new structure will minimize future dilutions should either corporation require additional equity capital.
Resverlogix will continue to focus on the clinical development of RVX-208, its small molecule for the treatment of atherosclerosis through therapeutic increases in Apo A-1. In addition, Resverlogix will continue with its RVX-208 related clinical trial for diabetes and the soon to launch Alzheimer’s disease clinical trial.
RVX Therapeutics will focus on innovative drug research and development by leveraging its epigenetics platform in multiple diseases including autoimmune and oncology, excluding Apo A-1 and RVX-208 technology.
It is anticipated that the directors and senior officers of RVX Therapeutics will continue to consist of current directors and senior officers of Resverlogix.
Resverlogix shareholders to receive one share in each of the two companies.
Under the terms of the Arrangement, Resverlogix’s shareholders will receive shares of a newly incorporated company (“Spinco”) that will own all of the shares of RVX Therapeutics on a basis that is proportional to their interest in Resverlogix. Every Resverlogix shareholder will receive one share in Spinco for every share held in Resverlogix at the effective date.
Every Resverlogix warrant holder at the effective date will receive one warrant in Spinco for every warrant held in Resverlogix. The exercise price of Resverlogix warrants would be reduced in accordance with the terms of the applicable warrant by an amount on a per share basis to reflect the fair market value of Spinco and the reduction would be allocated to the exercise price of the replacement Spinco warrants. If a Resverlogix warrant holder wishes to participate in the Arrangement and receive common shares of Spinco at the effective date, the warrant holder will need to exercise their Resverlogix warrants prior to the effective date of the Arrangement to acquire Resverlogix common shares.
Shares of Spinco will not be listed on an exchange initially, however the Board of Directors will give due consideration to whether it is in the best interests of shareholders of Spinco that the shares of Spinco are listed and at what time.
The implementation of the Arrangement will be subject to, among other things, board, shareholders, court and regulatory approvals, including TSX acceptance of the Arrangement.
Resverlogix must hold a special meeting of shareholders to approve the Arrangement. The record and meeting dates are anticipated to be on or around April 25, 2013 and May 28, 2013, respectively. A management information circular containing a complete description of the Arrangement and a description of tax implications to shareholders will be sent to shareholders of
Resverlogix in connection with the special meeting to approve the Arrangement.
There can be no assurances or guarantees that the spin-out will be completed.
Resverlogix will host a live conference call and webcast with Q&A at 11 a.m. MDT, April 8, 2013.
Conference call-in numbers:
Canada & USA Toll Free Dial In: 1-800-319-4610
Outside of Canada & USA call: +1-604-638-5340
About Resverlogix Corp.
Resverlogix Corp. (TSX:RVX) is a clinical stage cardiovascular company with an epigenetic platform technology that modulates protein production. Resverlogix is developing RVX-208, a first-in-class small molecule for the treatment of atherosclerosis. RVX-208 is the first BET bromodomain inhibitor in clinical trials. New compounds arising from Resverlogix’ epigenetic drug development platform function by inhibiting BET bromodomains and have the potential to impact multiple diseases including autoimmune diseases, cancer, neurodegenerative diseases and diabetes mellitus. Resverlogix’s common shares trade on the Toronto Stock Exchange (TSX: RVX). For further information please visit www.resverlogix.com. Follow us on our blog at http://www.resverlogix.com/blog/
This news release may contain certain forward-looking information as defined under applicable Canadian securities legislation, that are not based on historical fact, including without limitation statements containing the words “believes”, “anticipates”, “plans”, “intends”, “will”, “should”, “expects”, “continue”, “estimate”, “forecasts” and other similar expressions. In particular, this news release includes forward looking information relating to the structure and timing of the proposed transaction, future royalties on RVX-208, future value of RVX Therapeutics and the epigenetics platform and future research and development activities. Our actual results, events or developments could be materially different from those expressed or implied by these forward-looking statements. We can give no assurance that any of the events or expectations will occur or be realized. By their nature, forward-looking statements are subject to numerous assumptions and risk factors including but not limited to those assumptions and risk factors discussed in our Annual Information Form and most recent MD&A which are incorporated herein by reference and other documents we file from time to time with securities regulatory authorities, which are available through SEDAR at www.sedar.com. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement and are made as of the date hereof. We disclaim any intention and have no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information, please contact:
Donald J. McCaffrey
President & CEO
Director of Investor Relations
SOURCE: Resverlogix Corp.
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