Revelation: Therapeutics For Respiratory Viral Infections (NASDAQ:REVB)

Revelation Biosciences, Inc. (NASDAQ:REVB) is a clinical stage life sciences company developing therapeutics and diagnostics to address unmet needs, especially for respiratory viral infections “including SARS-CoV-2, variants of SARS-CoV-2, Influenza A, Influenza B, parainfluenza, respiratory syncytial virus, rhinovirus, and others.” The Company’s approach is to “prevent, treat and detect viral infections based on enhancing and detecting the innate immune system response to these viruses.” The Company on 3/24/2022 outlined an upcoming data analysis for its Phase 2b viral challenge study (RVL-VRL01) of its lead candidate.

Pipeline

The Company’s development candidates are based on the modulation or measurement of the body’s innate immune response. The development pipeline comprises three therapeutic products and one diagnostic product. The three therapeutic products REVTx-99a, REVTx-99b and REVTx-200 are based on the stimulation of the nasal (mucosal) innate immune system via interaction with toll-like receptor 4 (‘TLR4) that is activated by the active ingredient, PHAD (Phosphorylated HexaAcyl Disaccharide), a synthetic structural analog of monophosphoryl Lipid A (‘MPLA), also known generically as glucopyranosyl Lipid A (‘GLA). This produces protective cytokines including interferons and interferon-related proteins, which work in a variety of ways – killing the ability of an invading virus to proliferate and survive (‘REVTx-99a), reducing the inflammatory response (‘REVTx-99b), or mobilizing the adaptive immune response (‘REVTx-200).

Revelation’s lead therapeutic candidate REVTx-99a is a broad antiviral nasal solution being evaluated for the preventive treatment of H3N2 influenza (influenza A) infection in healthy humans. REVTx-99a works by activating a nonspecific, targeted, local, innate immune response differentiating it from most of the current treatments that focus on a specific, adaptive immune response. A Phase 1 healthy volunteer study showed that REVTx-99a was well tolerated, and significantly increased the levels of key intranasal cytokines in a dose dependent manner, but had no effect of systemic cytokines. A significant number of subjects receiving REVTx-99a achieved a greater than 5-fold change in IP-10 vs those given placebo. This is better than the 3-fold change in intranasal IP-10 shown in clinical studies, to provide protection from infection with influenza or rhinovirus. Dosing and enrollment was completed recently for the Phase 2 randomized, double-blind, placebo-controlled viral challenge study, RVL-VRL01 conducted in Belgium with healthy individuals aged between 18 and 55 years. Primary endpoint analysis is expected shortly in early 2Q-2022, with the final data analysis due thereafter within 2Q-2022. The Company plans to conduct further clinical studies in SARS-CoV-2, its variants, and other respiratory viruses.

REVTx-99b is being advanced with the premise of the same activation of protective cytokines being helpful in treating allergic rhinitis and chronic nasal congestion. A Phase 1 allergen challenge study is ongoing, which will evaluate the potential of REVTx-99b to prevent or treat allergies caused by ragweed pollen.

REVTx-200 is an intranasal immunomodulator adjunct to be used to generate mucosal immune response (IgA antibodies), supplementing the usual intramuscular vaccination that generates strong systemic immune response (IgG antibodies) but weak mucosal immune response. The Company plans to evaluate REVTx-200 in nonclinical models in 1H-2022 to demonstrate proof of concept.

REVDx-501 (trademarked REVID) in development at the clinical testing stage, is the company’s revelationary (pun intended) rapid diagnostic product for respiratory viral infections. Going by the contemporary virulent situation worldwide, this product’s features are exciting and revolutionary in that it will work as a universal screening tool for any virus type and any variants, will provide rapid point-of-care (‘PoC) results in <15 minutes, and is inexpensive and easy to manufacture. It does not need any specialized instrument or equipment to read but works in a lateral flow format, similar to a pregnancy test kit. The device “detects IP-10, a key cytokine that is up-regulated in nasal and oral secretions at the onset of respiratory viral infection.”

REVID test results of samples collected from symptomatic and asymptomatic subjects correlated and were in agreement with PCR (polymerase chain reaction) results. While all PCR positives (N=37) tested positive in REVID, some (N=21) of the PCR negatives (N=153) tested positive in REVID. However a 14% false positive rate from the assay is attributed to symptomatic subjects with infection other than SARS-CoV-2, such as from rhinovirus. The Company has planned for regulatory submission in 2H-2022.

Financials

Revelation Biosciences has a market capitalization of ~$36.73 million on a price of $2.58 as of 3/25/2022. Approximately 14.24 million shares are outstanding with 14.32% held by the public, and 29.71%, 22.44%, 12.43%, and 21.10% held by insiders, institutions and private corporations, and hedge funds respectively.

The Company completed a business combination and PIPE financing in January 2022, pursuant to which net proceeds of $11.9 million and $6.3 million, respectively were received. Together with the $4.14 million cash balance as of 9/30/2021, the Company has a cash runway of at least 12 months.

A registration statement was filed on 1/28/2022, amended 2/10/2022, by the Company for the resale of “5,173,334 Shares of Common Stock, including: 1,293,126 Shares of Common Stock; 1,293,541 Shares of Common Stock issuable upon exercise of the Pre-Funded Warrants; 2,586,667 Shares of Common Stock issuable upon exercise of the Common Warrants.” NASDAQ trading symbols are: REVB for the common stock, REVBW for the public warrants exercisable at $11.50 for a share of common stock, and REVBU for the units, which comprise one share of common stock and one warrant to purchase one share of the common stock.

Risks

The Company is an “emerging growth company” and a “smaller reporting company” and may take advantage of reduced reporting requirements.

The Company’s trials and product manufacture for trials are all dependent on third parties. Therapeutic candidates REVTx-99 and REVTx-200 are dependent on PHAD, a key ingredient manufactured by a single supplier. While the Company has secured enough material for its planned clinical studies, there is no agreement for future supply for unplanned clinical studies or commercial production.

The Company’s preclinical and clinical studies have all been conducted outside the US, hence the study results may not necessarily be acceptable to the FDA. Timelines may extend if further trials in the US are mandated. Furthermore, some of the third party study sites and resources are also used by the Company’s competitors, which could also cause extension of development timelines.

The Company does not have inhouse expertise for designing or conducting clinical trials, which may cause delays or the need to incur expenses for hiring experts.

The Company has incurred losses since inception and has an accumulated deficit of approximately $10.7 million as of 9/30/2021.

We never recommend companies with such low market capitalizations.

Bottomline

The REVID diagnostic device could be at the market before the Company looks for further financing of their development pipeline. Meanwhile, the Company’s stock saw some heavy trading in the past few days along with a slight rise in price, which at $2.58 is still at low levels offering a decent opening.