I'm James Molloy, the biotech and specialty pharmaceutical analyst here at A.G.P. In this chat, we're talking with Laxminarayan Bhat, CEO of Reviva Pharmaceuticals, RVPH. Reviva is developing brilaroxazine, a serotonin dopamine dual modulator being tested for CNS inflammatory and cardiometabolic diseases. The lead clinical program for brilaroxazine is the phase III RECOVER-2 trial, schizophrenia, the final confirmatory trial before NDA filing. RECOVER-2 is expected to start mid-2026, following formal feedback from an upcoming FDA meeting, to discuss a new formulation of brilaroxazine that RVPH is going to introduce into this trial. That should extend the patent life out to 2046. With us today from Reviva, as I said, is CEO Lax Bhat. Thank you for joining us here today, Lax.
Jim, thanks for having me here. You have been a great supporter of Reviva. Really appreciate.
Our pleasure. We're big believers in the underlying drugs and the management team as well. Could you give our listeners a brief overview of Reviva?
Sure. Reviva is a phase III clinical stage pharmaceutical company focused on developing novel therapies for psychiatric and immune disorders. We have two molecules in development discovered in-house. Lead molecule, brilaroxazine, we have completed multiple trials with treating over 900 patients from two large randomized trials, primarily in schizophrenia. Based on the clinical data generated to date, the drug has shown broad spectrum efficacy, robust efficacy compared to other treatment options currently available, especially for the most difficult component in schizophrenia, negative symptom, with a, I would say, very good safety profile. Less than 1% of motor side effect, that's one of the major side effects and issues with the currently available treatment, and other cardiometabolic side effects. We don't see those side effects with our drug. Overall, it is a very clean profile, we believe.
Compared with other treatment options, a good safety profile. Recently, we had a pre-NDA meeting with FDA in last December. We announced the FDA interaction as part of the pre-NDA meeting. It was a very good meeting outcome, to our knowledge. FDA reviewed all the clinical data, as part of the pre-NDA meeting. Did not raise any concern with the data. That is, we believe, it's a really good outcome. However, FDA said generating additional data in about a little over 300 patients, that would meet the requirement for NDA. The reason primarily for 300 patients, if you look at, there is nothing wrong with our data. Every single drug got approved first time for schizophrenia treated around 1,250 or little over 1,250 patients first time submitted for NDA. Our data at this time is little over 900 patients.
By treating additional 300 patients data, that would meet the requirement of historically what the FDA approved for all the antipsychotics. That's where we stand at this time. We hope to start the second phase III study, to meet that requirement later part of this year and submit NDA sometime in early 2028.
Now, the first phase III RECOVER trial, which reported out back in 2024, 2023, some excellent data, 50 mg hit the primary and secondary endpoints, and that's what you're going forward in the phase III RECOVER-2 trial. Maybe you can walk our listeners through, you did announce a new formulation of brilaroxazine for this trial. Can you walk through the pros and cons of this change in the next trial?
Sure. Why we are doing that extension of commercial exclusivity. With having good data, we reached out to institutional investors to raise capital for a second study and then completing an NDA as a package, as well as extensive interaction with major pharma companies. The feedback what we got, overall, the data generated, it is by and large liked by everybody. We haven't received any negative comments about our data. Only concern what we received was going beyond schizophrenia, that's where the more major value creation for antipsychotics. You see, our patent life or commercial exclusivity may be little short. What does that mean? Ours is a new chemical entity. The composition of matter patent expire in 2030. It's a new chemical entity. It qualifies for a five-year automatic extension. To my knowledge, every single new chemical entity over the last 25 years received that kind of extension.
This is called Hatch-Waxman Act extension in the United States. With that exclusivity, we can expect brilaroxazine commercial exclusivity till 2035. If the drug gets approved sometime in 2028, we can expect around a seven-year commercial exclusivity. Seven-year commercial exclusivity for a single indication may not be that short. Of course, most drugs currently in the market had around a 10 years commercial exclusivity, 10-14 years. Now the extension of the commercial exclusivity, it is doable. There are several examples companies have done. Again, not every single drug. It's not a straightforward walkthrough to develop a new form of drug, yet utilize the same data to commercial extension of the commercial exclusivity. It requires a significant expertise and in-depth knowledge in the space. We have been quietly working on this over the last 1 year.
Now we file patents, and then we generated a good data, preclinical data. It's by and large very predictable for clinical translation. With the generating data, now we are in a process of reaching out to FDA. We hope to have FDA alignment sometime mid this year. Following this FDA feedback, we will initiate the second phase III study, as I discussed earlier. You may ask a question, "Why do we need the FDA alignment before starting phase III?
Why can't we go ahead and then do the trial with the currently available drug that we successfully completed, and then before submitting an NDA, we can do extension and then file NDA? If we are able to extend the commercial exclusivity with a new form of brilaroxazine and then do an efficacy study, ideally in the second phase III, the commercial exclusivity will be more robust. As you may know, once we submit NDA, in this case, a generic competition is very high. Generating data in the efficacy as well as safety in the ongoing trial gives a more robust protection in the commercial exclusivity. That's what we are doing it. That's the delay in starting the second phase III.
In some ways, yeah. In some ways, it's unique that brilaroxazine is able to do it. Not every drug can just do a simple patent extension. You guys are in a unique position, but this is not unheard of either. Think of Intra-Cellular Therapies did something along the same lines with CAPLYTA back in 2017, 2018.
Yeah. To my knowledge, yes, that is true. In the past, there are other blockbuster drug in the historic data if you look at. I believe the atorvastatin, LIPITOR, is a blockbuster drug that also developed in the similar way what we are doing it. There is another drug, a blockbuster drug, Cialis, erectile dysfunction drug developed at ICOS. Later on it was acquired by Eli Lilly, was also developed in a similar way. There are several examples. Again, this is not something uncommon in the industry. There are various things it has to align with to have the commercial exclusivity. We are rightly positioned to extend the commercial exclusivity with the extension of a patent, filing a new patent that has exclusivity till 2046.
Having a commercial exclusivity with a new patent, we will have an opportunity to not only for schizophrenia till 2046, to create value quickly, expand the label claim beyond schizophrenia to bipolar, major depressive disorder, and ADHD. Especially the big pharma would like to have this kind of opportunity to expand. We hope with FDA feedback mid this year, that's a major catalyst. The company will be rightly positioned to partnering with the big pharma, as well as investment from major institutional investors in the life science space.
As you said, the path that you're looking to walk, start with schizophrenia and then maybe onto bipolar and major depressive. This is a well-worn path. This is, again, CAPLYTA followed a similar path on their way to hundreds of millions of dollars of sales.
Yeah. You mentioned about CAPLYTA. It's very interesting if you look at CAPLYTA. CAPLYTA, when they got approved for schizophrenia, to my knowledge, the patent exclusivity was till 2029, original patent. Then they started developing for bipolar and then later on MDD. The patent extension they received in 2024, sorry, commercial exclusivity until 2040, that led to a blockbuster-type acquisition of $14-plus billion. It is extremely important to have long patent life, at least 10-year patent life post-approval to go beyond single indication. In this case, like schizophrenia is a first indication, going beyond schizophrenia to bipolar major depressive disorder. This is a very well proven regulatory path forward. We use the safety data and the total data package, what we developed for, developing for schizophrenia to extend that one for it quickly to develop additional indication. This is a proven approach, having a commercial exclusivity extended.
This would be an attractive target for major pharma partners as well, and then also the investors to create value.
To that end, the acquisitions in this space are not small dollar acquisitions. Intra-Cellular Therapies was acquired by Johnson & Johnson, January 2025 for $14.6 billion, right? Who did we get? Bristol-Myers Squibb, who Karuna Therapeutics was acquired by Bristol-Myers Squibb for $14 billion in 2023. Cerevel Therapeutics acquired by AbbVie Inc. for almost $9 billion in 2023. I think this highlights the continued desire for these CNS compounds. What sort of interest have you seen? How would you characterize the potential development partners or outright acquisition environment for Reviva Pharmaceuticals?
As I said, with our extensive reach out to big pharma players, what you mentioned here. The feedback, what we received is data look good. It's very well differentiated compared to other treatment options. However, to maximize the value, this is a commercial exclusivity. It's very important. That's the kind of the primary feedback we got. If you look at it, ours is not a data wise. If you look at, it's not a me-too data. It is a very well differentiated 10-point separation from consistently from two trials. Especially the negative symptom, our drug addressed very well. Recently we published a paper as well with the biomarker. To my knowledge, ours is the only drug showed that kind of efficacy that is further supported by biomarker.
There is real data here, and then if we have commercial exclusivity extended, we believe this label claim can be expanded. It can benefit millions of patients in this space. The key bottleneck here for us to maximize the value is the commercial exclusivity we hope we have addressed. Now the next step is to have FDA alignment before starting the second phase III study. We believe that's a placeholder for NDA. Once we have the FDA feedback, we hope to start phase III study later part of this year.
Well, maybe over to a couple capital markets in the last four minutes or so here.
Sure.
You recently added $10 million to the balance sheet. That certainly helps out. Where does it put Reviva financially, and how does that affect the RECOVER-2 timelines? You recently moved to the OTC, not ideal, but not unheard of in the small cap biotech space. What are the expectations and plans to get back on the Nasdaq?
Yes. Again, we have been in a situation where, say, we need to extend the commercial exclusivity. Again, this is not something done overnight. It takes time. Again, the investors would like to have a catalyst clearly defined in the near term as well as the long term. Long term, we know that we are going to file NDA. The near term, this is dependent on FDA feedback. As sometimes say, FDA feedback and other things, it's very hard to define the timeline. It may couple of weeks more as well. We raised a small amount of capital to mitigate the financing overhang when we have catalyst, major catalyst with FDA feedback. The $10 million what we raised, that we had already another $15 million cash when we raised $10 million. Altogether today, we have little over $20 million cash.
Our burn rate is very low. We are burning around $2 million, little over $2 million per quarter. Until we start the second study, our CMC development for extending the commercial exclusivity, that's the major focus. Our burn rate is very small. We have a runway into Q2, We are expecting major catalyst in the next two to three months mid of this year.
Once we have the major catalyst, FDA feedback, we still have over six months runway. We should be able to bring right kind of capital to the company and then regain Nasdaq compliance later part of this year. Regaining a Nasdaq compliance is a top priority, and then commitment to investors. We are working very hard. Hopefully later part of this year we will regain compliance with the catalyst coming in.
All right, excellent. Well, we're down to our last minute. Any quick final comments you'd like to make?
Yeah. As I discussed, we are anticipating or expecting major catalyst, the commercial exclusivity that is a kind of a wish list for investors we talk to, then major partners that we are expecting sometime mid this year. With this major catalyst, we hope to regain Nasdaq compliance as well as have some productive outcome with the partnering as well in the coming months. In the second part of this year, it's hope it will be a very productive, transformative time for Reviva.
Indeed, the H2 of 2026 much depends on how things turn, and we're expecting some big things. Thank you very much, Lax, for joining us today, and thank you for all for listening as well. Please stay tuned for our next Fireside Chat coming up right after this. Thank you.
Thank you, Jim. Thanks for your continued support.