Reviva Pharmaceuticals Holdings, Inc. (NASDAQ:RVPH) is a late-stage biopharmaceutical company developing innovative therapies to address significant unmet medical needs in the areas of central nervous system (CNS), inflammatory, and cardiometabolic diseases. The company's lead drug candidate, brilaroxazine (RP5063), is currently in advanced clinical development for the treatment of schizophrenia, with positive topline results recently announced from its pivotal Phase 3 RECOVER-1 trial.

Business Overview

Reviva was founded in 2006 and is headquartered in Cupertino, California. The company's primary focus is the development of brilaroxazine, a novel serotonin-dopamine signaling modulator, for the treatment of various neuropsychiatric and respiratory indications. Brilaroxazine has demonstrated promising results in previous clinical trials and is currently being evaluated in a registrational Phase 3 study for the treatment of acute schizophrenia.

In addition to brilaroxazine, Reviva's pipeline includes RP1208, a compound in preclinical development for the treatment of depression and obesity. The company utilizes a chemical genomics-driven technology platform and proprietary chemistry to discover and develop new drug candidates.

Positive Topline Results from Pivotal Phase 3 RECOVER-1 Trial

On October 30, 2023, Reviva announced positive topline results from its pivotal Phase 3 RECOVER-1 trial evaluating the efficacy, safety, and tolerability of brilaroxazine in adults with schizophrenia. The trial successfully met its primary endpoint, with the 50 mg dose of brilaroxazine achieving a statistically significant and clinically meaningful 10.1-point reduction in Positive and Negative Syndrome Scale (PANSS) total score compared to placebo at week 4. Brilaroxazine also demonstrated statistically significant and clinically meaningful improvements across multiple secondary endpoints, including positive symptoms, negative symptoms, social cognition, and personal and social performance.

The clinical safety and tolerability profile of brilaroxazine was also favorable, with no drug-related serious adverse events or treatment-emergent serious adverse events observed, and low discontinuation rates that were lower than placebo. These positive results support the continued development of brilaroxazine for the treatment of schizophrenia.

Ongoing and Planned Clinical Development

In addition to the completed RECOVER-1 trial, Reviva's clinical development plan for brilaroxazine includes an ongoing 1-year open-label extension (OLE) trial evaluating long-term safety and tolerability, as well as a soon-to-be-initiated registrational global, randomized 4-week Phase 3 RECOVER-2 trial. The company expects to report topline data from the OLE trial in Q4-2024 and initiate the RECOVER-2 trial in the second quarter of 2024, with completion anticipated in the third quarter of 2025.

Reviva is also exploring the potential of brilaroxazine for the treatment of other neuropsychiatric and respiratory indications, including bipolar disorder, major depressive disorder, Alzheimer's disease-related psychosis and behavior, Parkinson's disease psychosis, attention-deficit/hyperactivity disorder, pulmonary arterial hypertension, and idiopathic pulmonary fibrosis. The company has previously completed Phase 1 studies for these additional indications.

Financials

Reviva is a clinical-stage biopharmaceutical company and has not generated any revenues from the sale of products. For the fiscal year ended December 31, 2023, the company reported a net loss of $24.3 million and had no revenue. The company's annual operating cash flow and free cash flow for the same period were both negative $18.9 million.

As of March 31, 2024, Reviva had cash and cash equivalents of $12.0 million. The company believes it will need additional fundraising activities and cash on hand during the second quarter of fiscal year 2024. These conditions raise substantial doubt regarding the company's ability to continue as a going concern for a period of one year after the date the financial statements are issued.

For the three months ended March 31, 2024, Reviva reported a net loss of $7.4 million, with no revenue generated during the quarter. The company's operating cash flow and free cash flow for the three-month period were both negative $11.7 million.

Reviva's research and development expenses for the three months ended March 31, 2024 were $5.8 million, compared to $5.5 million in the prior-year period, an increase of 5.5%. The increase was primarily attributable to higher stock-based compensation, salaries and wages, and consultant fees, partially offset by a decrease in clinical research and development costs for brilaroxazine.

General and administrative expenses for the three months ended March 31, 2024 were $2.1 million, compared to $1.5 million in the prior-year period, an increase of 42.5%. The increase was primarily due to higher stock-based compensation and consultant and professional expenses, partially offset by a decrease in legal expenses.

Liquidity

As of March 31, 2024, Reviva had cash and cash equivalents of $12.0 million, compared to $23.4 million as of December 31, 2023. The company's working capital deficit was $1.0 million as of March 31, 2024, compared to a working capital surplus of $6.5 million as of December 31, 2023.

Reviva believes it will need additional fundraising activities and cash on hand during the second quarter of fiscal year 2024. The company will seek to fund its operations through public or private equity or debt financings or other sources, which may include collaborations with third parties. Adequate additional financing may not be available to the company on acceptable terms, or at all.

Risks and Challenges

Reviva's business is subject to various risks and uncertainties, including the successful completion of its ongoing and planned clinical trials for brilaroxazine, obtaining regulatory approvals, successfully commercializing its product candidates, and securing additional financing to fund its operations. The company's ability to continue as a going concern is also dependent on its ability to raise sufficient capital to fund its operations.

Additionally, Reviva has identified material weaknesses in its internal control over financial reporting and clinical trial expense accruals, which it is actively working to remediate. These material weaknesses could impact the company's ability to accurately report its financial results and maintain effective disclosure controls and procedures.

Outlook

Reviva's positive topline results from the pivotal Phase 3 RECOVER-1 trial for brilaroxazine in schizophrenia represent a significant milestone for the company. The favorable safety and tolerability profile, coupled with the demonstrated efficacy, position brilaroxazine as a potential best-in-class treatment for this debilitating condition.

As Reviva advances its clinical development programs, including the upcoming RECOVER-2 trial and long-term safety study, the company will need to secure additional financing to support its operations. The successful execution of its development strategy and the ability to obtain necessary funding will be critical to Reviva's future success and its ability to bring innovative therapies to patients in need.

Conclusion

Overall, Reviva's late-stage pipeline, led by the promising brilaroxazine candidate, and its proprietary drug discovery platform provide a solid foundation for the company's future growth. However, the company's near-term liquidity concerns and the need to address material weaknesses in its internal controls will require close monitoring and proactive management by the Reviva team.