I’ve been scouting for prospects. While doing research on a different pharmaceutical company, I discovered Reviva Pharmaceuticals (RVPH: NASDAQ). From the Reviva website:

Reviva is a biopharmaceutical company that discovers, develops and seeks to commercialize next-generation therapeutics for diseases representing significant unmet medical needs and burden to society, patients, and their families.”

Of particular interest to me was that their lead drug candidate, RP5063 (Brilaroxazine), is a promising new drug which, in phase 1 and phase 2 trials, has demonstrated significant efficacy in treating a very serious mental health disorder – Schizophrenia – Which affects 1% of the world’s population. The drug also shows promise in treating a range of other serious mental health issues including Bipolar disorder, ADHD, and Major Depressive Disorder.

Like many, my family has been touched by mental health issues. I have first hand experience at caring for individuals who suffer with these insidious diseases. I’ve actually spent a great deal of time researching and learning about the benefits, problems and limitations of this category of drugs, which are called Neuroleptics.

In a nutshell, the key issue is side effects. Neuroleptics can be effective in treating mental health disorders, however side effects can be common, problematic, and even dangerous. As a result, many patients who desperately need to be on medication aren’t, or do not adhere to their prescription for very long. Severe weight gain, diabetes, tremors, muscle spasms, sexual dysfunction, and the worst of all tardive dyskinesia (which resembles Parkinson’s disease, and can be permanent) make adherence to this class of drugs challenging if not impossible for many patients.

Another issue is efficacy. Effectiveness. There is no medication that is guaranteed to be effective. Finding the right medication for a patient typically involves trial and error, and managing or coping with side effects, until the acceptable level of symptom relief and side effect minimization are found.

The company notes

“There are no therapies available that adequately address the complex mix of positive and negative symptoms, mood, and cognitive impairment associated with schizophrenia,” said Bhat. “With an estimated 30–50% rate of treatment discontinuation among acute patients and 42–74% among stable patients due to suboptimal efficacy and side effects such as drug-induced movement disorders, obesity, diabetes, and even sexual dysfunction caused by existing antipsychotic treatments, the search for better therapeutic options is ongoing.

And now the good news. At the conclusion of its Phase 2 trials, Reviva reported

A phase 2 randomized, double blind, placebo-controlled, multi-center safety and efficacy trial of brilaroxazine in acute schizophrenia patients—patients who are experiencing severe symptoms—also showed significant PANSS total score reduction over placebo and, in addition, significantly higher compliance rates. No cardiometabolic, cardiovascular, prolactin or endocrine complications were recorded compared to placebo. Based on these favorable results, the FDA has provided Reviva with guidance for a potential ‘superior safety’ label claim.

In other words, the drug they are developing is demonstrated effective, against a range of symptoms, and has a very ‘benign’ side effect profile. They state in their investor presentation that “Brilaroxazine has a favorable efficacy and side effect profile vs. currently approved antipsychotics”. I read that as more effective and safer.

At this point the drug has not been approved by the FDA and the company is commencing Phase 3 trials. This may take awhile. But damn, it looks and sounds good. And it’s nice to be investing in something that may be able to really improve people’s lives.

All that being said, to be a DTM5 investment, the company has to pass my series of screens to prove its merit. So far, so good. Reviva has a very low number of outstanding shares (15 million!), clean balance sheet, adequate liquidity, legitimate management and strategy. The SP has been on a grind to the bottom, along with most of the micro cap Healthcare / Tech / Pharma sectors. The valuation is low, with a Market Cap of 30 million backed by 30 million of cash on its balance sheet as of Dec 31st. And to top it all off this company is seriously off the radar. I was fortunate to stumble across it while looking for something else. I don’t think anyone knows about it at all. Yet.

I’ve opened a modest position in RVPH over the past week. It feels great to be investing in a company that may improve the lives of those who need it the most. But a win here is by no means a certainty. Even if phase 3 trials come back very positive, the path to commercialization for a drug can be long, expensive and problematic. But this is the kind of company I feel good about taking a risk with.

GLTA!