Rezolute, Inc. (NASDAQ:RZLT) is a clinical-stage biopharmaceutical company developing transformative therapies for devastating rare and chronic metabolic diseases. The company's primary focus is on two lead compounds, RZ358 and RZ402, which hold significant potential to address unmet medical needs in hyperinsulinism and diabetic macular edema, respectively.

Business Overview

Rezolute is dedicated to developing innovative solutions for patients suffering from metabolic disorders. The company's lead asset, RZ358, is a fully human monoclonal antibody designed to treat hypoglycemia resulting from excessive secretion of insulin or insulin-like substances. RZ358 counteracts excess insulin receptor activation, thereby improving hypoglycemia. The company has commenced a global Phase 3 study, dubbed "sunRIZE," to evaluate RZ358 in patients with congenital hyperinsulinism (cHI), an ultra-rare pediatric and genetic form of hyperinsulinism.

In addition, Rezolute has expanded access programs that allow U.S. physician-investigators to administer RZ358 on a compassionate use basis for the management of hypoglycemia resulting from hyperinsulinism associated with tumors (tumor HI). The company is also developing RZ402, a small molecule selective and potent plasma kallikrein inhibitor (PKI), as a potential oral therapy for the chronic treatment of diabetic macular edema (DME), which is currently in a Phase 2 study.

Congenital Hyperinsulinism (cHI)

cHI is the most common cause of recurrent and persistent hypoglycemia in children. Individuals with cHI typically present with signs or symptoms of hypoglycemia shortly after birth. Untreated, this condition can result in significant brain injury and death. Additionally, recurrent or cumulative hypoglycemia can lead to progressive and irreversible damage over time, including serious and devastating brain injury, seizures, neurodevelopmental problems, feeding difficulties, and a significant impact on patient and family quality of life. In cases unresponsive to medical management, surgical removal of the pancreas may be required.

sunRIZE Phase 3 Study

In December 2023, Rezolute initiated the sunRIZE study, a randomized, double-blind, placebo-controlled, parallel arm evaluation of RZ358 in participants with cHI who are not adequately responding to standard-of-care medical therapies. The company plans to enroll approximately 56 participants ages three months and above from up to 20 clinical trial sites in more than 15 countries in Europe, the Middle East, Asia, and North America, with the goal of completing enrollment by the end of 2024 to enable announcement of topline results in mid-2025.

In the company's previous Phase 2 RIZE study in patients with cHI ages two and older, nearly all participants achieved significant improvement in hypoglycemia across multiple endpoints, including the primary and key secondary endpoints planned for the sunRIZE study. At doses and exposures planned for sunRIZE, RZ358 was generally safe and well-tolerated, and resulted in median improvements in hypoglycemia of up to ~90% at top doses.

Partial Clinical Holds and Ongoing Investigations

The sunRIZE study is currently not being conducted in the U.S. due to partial clinical holds (PCHs) imposed by the FDA's Office of Cardiology, Hematology, Endocrinology and Nephrology – Division of Diabetes, Lipid Disorders, and Obesity (the "Division"). These PCHs prevent the company from dosing participants under the age of 12 and restrict dosing participants above the lowest dose studied to date, 3mg/kg.

The PCHs were imposed due to findings of microvascular injury in liver sinusoidal endothelial cells (LSECs) in Sprague Dawley rats (SD rats) at potentially clinically relevant doses and exposures of RZ358. Rezolute believes these findings are specific to the SD rat and not relevant to humans, as no liver findings were observed in monkey toxicology studies at significantly higher RZ358 dose levels, and there have been no liver findings in clinical studies conducted to date.

To further investigate the mechanism of toxicity in SD rats and its potential relevance to humans, Rezolute has retained advisement from a former senior FDA pharmacology-toxicology official and has partnered with a research group with LSEC expertise. In the second half of 2023, the company conducted additional in-vivo and in-vitro non-clinical studies, including a CD-1 mice toxicology study and a brown Norway rat toxicology study, to enhance its understanding of the SD rat findings. The results from these studies suggest that the liver findings are specific to the SD rat and not relevant to other rodent species or humans.

Rezolute plans to submit a complete response to the PCHs to the Division in the coming weeks, with the goal of achieving liberalization of the PCHs. Nonetheless, there can be no assurance that the Division will agree to modify or remove the PCHs.

Tumor Hyperinsulinism (Tumor HI)

Tumor HI may be caused by two distinct types of tumors: islet cell tumors (ICTs) and non-islet cell tumors (NICTs), both of which lead to hypoglycemia due to excessive activation of the insulin receptor. Current therapies for tumor HI can be grouped into two main categories: (a) tumor-directed de-bulking therapies, and (b) medical therapies that directly treat HI and the associated hypoglycemia. However, a significant unmet need exists for treatment options with improved efficacy and tolerability, as normalization of glucose levels is crucial to ensure patients are fit to receive cancer treatment and to reduce mortality.

Expanded Access Program

Rezolute maintains an expanded access program (EAP) for a variety of HI indications, including tumor HI, to make RZ358 available on a compassionate use basis when available therapeutic options have failed, and an individual's hypoglycemia is unmanageable. Through the EAP, several patients with intractable hypoglycemia caused by metastatic insulinomas or other insulin-secreting metastatic cancers have been treated with RZ358, achieving substantial improvement in hypoglycemia and enabling them to discontinue continuous intravenous dextrose, resume tumor-directed therapies, and be discharged from the hospital.

Regulatory Developments and Next Steps

In January 2024, Rezolute had a Type B pre-IND meeting with the FDA's Division to discuss a potential IND application and a clinical and regulatory development strategy for tumor HI. The Division acknowledged the unmet need and the potential therapeutic benefit of RZ358 as demonstrated by the EAP cases and the efficacy shown in previous clinical experience in cHI. The Division is aligned with Rezolute that it would be warranted to study RZ358 in an IND-opening late-stage (registrational) clinical trial for tumor HI, which the company is currently evaluating as a potential second rare disease indication for RZ358.

RZ402 for Diabetic Macular Edema (DME)

Diabetic retinopathy, including DME, affects approximately one-third of adults with diabetes and is the leading cause of vision loss in the working-age population. DME is characterized by swelling of the retina and thickening of the macula, the part of the eye responsible for high-resolution vision. Current standard of care for DME involves anti-vascular growth factor (anti-VEGF) injections into the eye, which require continued administration over long periods to preserve vision. Rezolute believes an oral PKI therapy like RZ402 could be an ideal approach for targeting the systemic vascular disease of DME, potentially leading to better clinical outcomes.

Phase 2 Study

In December 2022, Rezolute initiated a Phase 2 U.S. multi-center, randomized, double-masked, placebo-controlled, parallel-arm study to evaluate the safety, efficacy, and pharmacokinetics of RZ402 administered as a monotherapy over a 12-week treatment period in participants with DME who are naïve to, or have received limited anti-VEGF injections. The company has completed dosing of 94 participants in the study, and topline results are expected to be announced in May 2024.

Financials

For the fiscal year ended June 30, 2023, Rezolute reported a net loss of $51.8 million and had no revenue. The company's annual operating cash flow was -$44.5 million, and its annual free cash flow was -$44.6 million.

For the nine months ended March 31, 2024, Rezolute reported a net loss of $45.5 million. The company's quarterly operating cash flow was -$38.8 million, and its quarterly free cash flow was -$38.8 million.

As of March 31, 2024, Rezolute had cash and cash equivalents of $5.9 million and investments in marketable debt securities of $75.7 million, providing a total of $81.6 million in capital resources. The company's working capital was approximately $75.3 million as of the same date.

Liquidity

Rezolute's primary source of liquidity has historically been from the completion of private and public offerings of its debt and equity securities. The company's most significant contractual obligations consist of milestone payments pursuant to licensing agreements with XOMA Corporation and ActiveSite Pharmaceuticals, Inc.

Based on the company's current cash, cash equivalents, and investments in marketable debt securities, management believes Rezolute's existing capital resources will be sufficient to fund its contractual obligations and planned activities to advance its clinical trials at least through the third quarter of calendar year 2025. However, the company will need to obtain additional equity or debt financing to fund all of its long-term capital requirements, including potential milestone payments and the commercialization of its product candidates, if approved.

Risks and Challenges

Rezolute faces several risks, including the potential failure of its clinical trials, regulatory hurdles, and the need for additional financing to fund its long-term operations. The company's ability to successfully develop and commercialize its product candidates is critical to its future success.

Outlook

Despite these challenges, Rezolute remains focused on advancing its promising pipeline of transformative therapies for metabolic diseases. The company's primary objectives for the first half of 2024 are to complete the Phase 2 study for RZ402 and continue site activation and patient enrollment for the sunRIZE study to enable completion of enrollment by the end of this calendar year.

Conclusion

Rezolute is a clinical-stage biopharmaceutical company with a compelling pipeline of therapies targeting rare and chronic metabolic diseases. The company's lead asset, RZ358, has shown promising results in the treatment of congenital hyperinsulinism and has the potential to address the unmet need in tumor-induced hyperinsulinism. Additionally, Rezolute's RZ402 is being developed as a potential oral therapy for the chronic treatment of diabetic macular edema. While the company faces regulatory and financial challenges, Rezolute's commitment to advancing its transformative therapies and its strong capital position provide a solid foundation for future growth and value creation.