Invex Builds a Second Neurology Pipeline With Rekover Acquisition

Rekover Deal Adds a Second Neurology Platform

Invex Therapeutics Limited (ASX:IXC) is pursuing a sizeable expansion of its drug pipeline, agreeing to acquire 100% of New Zealand biotechnology company Rekover Therapeutics without paying cash consideration. Instead, Rekover’s vendors would receive 45 million Invex shares and up to 91.25 million performance rights tied to clinical and regulatory milestones.

The acquisition would give Invex control of Rekover’s nalfurafine program. Nalfurafine is an approved anti-itch medicine used in Japan and South Korea for dialysis patients, while Rekover holds licences to intellectual property covering its use in demyelinating diseases. Patents have been issued in the United States, Europe, Australia and Russia, with applications pending in Canada and New Zealand.

REVIVE Trial Targets Chronic Optic Neuropathy

Rekover has designed REVIVE as a Phase 2a randomised, double-blind, placebo-controlled study in people with relapsing-remitting multiple sclerosis and chronic optic neuropathy. The Australian and New Zealand trial is planned to enrol between 75 and 195 participants, who would receive one of two nalfurafine doses or placebo daily for 12 months.

The primary efficacy measure is the change from baseline in best-corrected low-contrast letter acuity at 12 months. An interim analysis is planned roughly six months after the 75th participant has been dosed. The announcement provides no clinical efficacy data for nalfurafine: REVIVE remains a proposed study, rather than a trial with results in hand.

$10 Million Raise Funds Trial and Existing Assets

Invex has secured commitments for an initial $900,000 placement at $0.08 a share and plans a further $9.1 million placement at the same price, subject to shareholder approval. Tenmile, an associate of Tattarang, will subscribe for $4.5 million of the larger placement. Invex says the combined $10 million will be directed principally to REVIVE while continuing development of its Exenatide assets, including its collaboration with Tessara Therapeutics, which previously expanded its preclinical Alzheimer’s research program in the Tessara research collaboration.

Over the 12 months after completion, Invex intends to allocate $6.7 million to the Rekover business and REVIVE, $2.975 million to its existing business, $3.575 million to working capital and corporate administration, and $750,000 to transaction costs. Those figures are stated as current intentions, and the company says it may alter the allocation as circumstances change.

Share Count and Control Structure Change Materially

If the deal proceeds, Invex’s shares on issue would rise from 75.15 million to 245.15 million, before any other issues or option exercises. A further 91.25 million shares could be created if the performance rights vest. Class A rights depend on an interim result allowing the trial to continue, Class B rights on at least one dose meeting the primary trial endpoints, and Class C rights on an effective US FDA investigational new drug application.

The transaction would also change the company’s ownership dynamics. Tenmile, Tattarang and their associates are expected to increase their combined voting power from 10.24% after the initial placement to 32.39% on completion. The deal therefore requires shareholder approval, including approval under section 611 of the Corporations Act, as well as an Independent Expert’s Report and other conditions. A general meeting is expected in late November or early December, with completion targeted for early December if the conditions are met.