Join the BioNap Email List:

Monday, June 13, 2016

Revive Therapeutics Targets Cystinuria With Bucillamine

Focus On Rare Diseases Could Results In Substantial Returns

Targeting rare and orphan diseases is a business model validated by many smaller biopharmaceutical companies. Although the patient populations are modest, they are highly specific and can be efficiently targeted with a focused sales effort. Limited competition and agency-backed intellectual property protection make this strategy incredible profitable, and one that has gained in popularity over the past decade. Cystinuria is one such orphan disease, the success of which targeting has been substantiated by Retrophin, Inc (NASDAQ: RTRX).

In late May 2016, Revive Therapeutics (TSXV: RVV) (OTC: RVVTF) announced it intends to raise $1.5 million through a best-efforts non-brokered private placement. Raising such a small amount of $1.5 million usually would not excite biopharma investors, but I find this case quite intriguing given the current market value of Revive at only $2.5 million as of today. I also find management's comments in the release interesting. The proceeds will be used to advance the development of bucillamine into a Phase 2 clinical study during the second half of 2016 for the treatment of cystinuria.

Bucillamine is a drug that has been approved and used in Japan for over three decades, mostly for the treatment of rheumatoid arthritis (RA). Ayumi Pharma reports 57 million tablets sold in 2015. Recent data confirm the efficacy of bucillamine in RA (1), as well as other oxidative conditions such as cisplatin-induced ototoxicity (2) and transplantation-associated reperfusion injury (3). Revive has previously studied bucillamine in a Phase 2a study in patients with gout, demonstrating efficacy comparable to Takeda's Colcrys® (4).

The opportunity in gout is real, although further advancement is something that is beyond the current capabilities of Revive. As such, Revive will seek to partner bucillamine for the next steps in gout and instead focus on cystinuria, a smaller patient population but one that offers potential peak sales in the $500 million range given the success of Retrophin's Thiola® and the conceptual superiority of bucillamine to monothiol drugs like tiopronin and d-penicillamine.

I'm eagerly watching the success of Revive's planned private placement. I think if the deal closes investors could see a substantial recovery in the shares. I expect Revive to file a U.S. investigational new drug (IND) application for bucillamine in the treatment of cystinuria shortly, which should allow the initiation of a Phase 2 study in the coming months.

Below is an introduction to cystinuria and the market opportunity that Revive has with bucillamine. I believe the shares are vastly under-valued as of today, artificially depressed by the announced best-efforts private placement - a quandary unique to the backward way in which Canadian companies must raise cash. With limited investment and a rather quick turnaround, Revive should be able to demonstrate proof-of-concept with bucillamine in cystinuria and set the stage for a major re-valuation of the shares in 2017.

About Cystinuria

Cystinuria is a rare autosomal recessive genetic disorder characterized by an impairment of transport of the dibasic amino acids, cystine, ornithine, lysine, and arginine (COLA) in the kidneys; specifically, the epithelial cells of the proximal tubules and small intestine. Genetic mutations in two genes, SLC3A1 on chromosome 2p and SLC7A on chromosome 19q, have been identified as responsible for the disease. Over 160 different genetic mutations in the SCL3A1 gene and 116 in the SLC7A1 gene have been shown to cause cystinuria (5).

The important clinical manifestation of the disease is a build-up of cystine in the urine, which in turn results in crystallization and stone formation in the kidneys and bladder. In healthy individuals, most cystine dissolves and returns to the bloodstream after entering the kidneys. People with cystinuria have the aforementioned genetic defects that interfere with this process. No curative treatment of cystinuria exists, and typically patients have a lifelong risk of stone formation, repeated surgery, and impaired renal function.

Worldwide, the overall prevalence is one person per 7,000 population, although the disease is far less common in Japan (one case in 18,000) than Western Europe (one case per 2,500) (6). In the U.S., about one of out every 15,000 individuals has cystinuria, which equates to a target population of approximately 21,000 individuals (7). Another 3,000 patients reside in Canada. Within the total population, there are varying degrees of disease severity. Nevertheless, all cystinuria patients are at risk for stone formation and over 50% will have form stones at some point during their lifetime (8).

Current Treatment Options

Therapy to reduce stone formation focuses on lowering urine cystine concentration and increasing cystine solubility. Cystine is poorly soluble in urine and prone to crystallization and stone formation at concentrations above 300 mg/l. As such, the primary non-pharmacological intervention for preventing cystine stones is to increase fluid intake. Patients with cystinuria are recommended to drink at least three liters of fluid a day (that's ten 10 oz. glasses of water).

The solubility of cystine is also highly dependent on pH. At physiological pH (~7) maximum cystine solubility is between 200 and 400 mg/l. Acidic urine (pH of 5) greatly reduces the solubility to below 250 mg/l; however, at pH greater than 7.5 the solubility increases exponentially. In fact, the solubility of cystine doubles to 500 mg/l at pH 7.5 (9). Unfortunately, excessive alkali therapy is not advisable. When urinary pH increases above 7.0 with alkali therapy, the complication of calcium phosphate nephrolithiasis may ensue because of the enhanced urinary supersaturation of hydroxyapatite in an alkaline environment (10).

Increase fluid intake and alkali therapy are not always feasible or effective. In fact, work published by researchers from Duke University found that therapeutic success with these more conservative approaches, defined as a urine cystine concentration below 300 mg/l, was achieved by only 15% of patients treated at the University Medical Center over an eight-year period (11). For patients that cannot reduce stone formation on these conservative programs, pharmaceutical intervention is recommended. The two leading pharmaceutical products for the treatment of cystinuria are Retrophin's Thiola® (tiopronin) and Valeant's Cuprimine® (d-penicillamine).

Penicillamine is a first-line chelating agent use for the removal of excess copper in patients with Wilson's disease and to reduce excess cystine in patients with cystinuria. The mechanism of action for cystine reduction is by disulfide interchange between d-penicillamine and cystine, resulting in the formation of penicillamine-cysteine disulfide, a substance that is much more soluble than cystine and readily excreted. Cystine is a combination of two cysteine (cys) amino acids whose thiol side chains have been oxidized to form cystine.

Cystine is far less soluble than cysteine and thus creates problems at urine concentrations above 300 mg/l. Penicillamine competes with excess cysteine to form penicillamine-cysteine disulfide, a far more soluble compound (roughly 50x more so) than cystine. Penicillamine also deprotonates cystine to form penicillamine-cysteine disulfide. The drug is highly effect in the treatment of cystinuria but has poor tolerability and serious safety concerns. The use of penicillamine has been associated with fatalities due to certain diseases such as aplastic anemia, agranulocytosis, thrombocytopenia, Goodpasture's syndrome, and myasthenia gravis. The incidence of adverse events ranges between 30 and 60% (12).

Tiopronin received FDA approval in 1988 for the prevention of cystine stone formation in patients with severe homozygous cystinuria with urinary cystine greater than 500 mg/day, who are resistant to treatment with conservative measures of high fluid intake, alkali and diet modification, or who have adverse reactions to penicillamine. The product was available as a generic and largely unpromoted until the rights to Thiola® were acquired by Retrophin, Inc. in May 2014 (13). Retrophin subsequently raised the price of the drug some 20-fold (14) and currently controls the bulk of the U.S. market.

Thiola® costs roughly $27 per 100mg pill (15), and with the majority of patients taking 1,000 mg per day (16), the yearly cost of the drug is roughly $100,000. Estimated net sales of Thiola® to Retrophin in 2015 were $55 million (average of available reports). A generic, delayed release version was just recently introduced by Imprimis Pharmaceuticals at a cost of roughly 60% less (17). Nevertheless, Evaluatepharma estimates that Thiola® will post sales of $100 million in the U.S. in 2017 and has peak sales of $200-250 million.

Tiopronin has similar efficacy and mechanism of action to penicillamine. Tiopronin is an active reducing agent which undergoes thiol-disulfide exchange with cystine to form a mixed disulfide of tiopronin-cysteine. The drug is ideal for patients with allergic reactions or intolerability to penicillamine and considered to be the most tolerable of the two drugs (18). Retrophin's strategy of improved patient access and support, along with home delivery is clearly paying off.

Enter Revive’s Bucillamine – The First Potential New Drug For Cystinuria In 30+ Years

Despite the success of Thiola®, there exists a significant market opportunity for another player in this space. Thiola® does have serious side effects including aplastic anemia, agranulocytosis, thrombocytopenia, Good pasture’s syndrome or myasthenia gravis. Patients on the drug should have peripheral blood counts, platelet counts, hemoglobin, serum albumin, and urinary protein levels checked on a regular basis. Patients are also advised to have liver function tests and abdominal roentgenograms on a yearly basis.

Retrophin estimates that the target market for Thiola® is 4,000 to 5,000 patients in the U.S. Recall from above, 50% of the roughly 21,000 patients in the U.S. are at high risk for stones and these 4,000 to 5,000 are the ones not achieving therapeutic success with more conservative approaches. The 2015 estimated sales for Thiola® suggests that Retrophin has penetrated only 10% of its target market ($55 million in sales / $100,000 per patient). Even if we assume 50% of the patients taking the drug are getting it for free, Retrophin's penetration is still only 20%.

Revive Therapeutics is developing bucillamine, a dithiol derivative of tiopronin for the treatment of cystinuria. Revive believes that bucillamine can offer patients a safer, more effective treatment option than either of the two monothiol drugs, Thiola® or d-penicillamine. Theoretically, bucillamine should be twice as effective as Thiola® at the same concentration or equally as effective at lower concentrations, potentially making the drug more tolerable to patients.

As noted above, bucillamine has been used in Japan and Korea for decades, with the majority of the use in rheumatoid arthritis. However, researchers have studied the efficacy of the drug in cystinuria with impressive results. The drug was likely never commercialized in Japan for cystinuria given an incidence rate slightly lower than the U.S. (19) and no orphan drug pathway in Japan during the 1980s, thus making it not economically feasible. Nevertheless, researchers out of Osaka University School of Medicine conducted in vitro and in vivo studies during the early 1990s that provide excellent proof-of-concept for Revive (20).

In vitro study: The effects of bucillamine compared to tiopronin was tested in whole urine by adding l-cystine at a concentration of 500 μg/mL along with half and equal concentrations of the two study drugs. Results show that the concentration of cystine was markedly reduced by both tiopronin and bucillamine due to the formation of cysteine-tiopronin or cysteine-bucillamine; however, the relative activity of bucillamine was 5 to 12% stronger than that of tiopronin and calculated the relative molecular activity of bucillamine was approximately 40 to 50% stronger than that of tiopronin. In other words, the data show bucillamine dissolved urinary cystine much more effectively than tiopronin at the same molecular weight and a little more effectively than tiopronin at the same drug concentration.

In vivo study: Japanese researchers then tested bucillamine and tiopronin in three patients with confirmed cystinuria in a controlled, two-way, cross-over, wash-out design study of identical doses of each drug. The effectiveness of bucillamine was compared with tiopronin by analyzing the 24-hour urine samples under three different conditions: control, bucillamine, and tiopronin. The data show both bucillamine and tiopronin were effective in reducing urinary cystine concentration at 24 hours but that bucillamine was statistically superior (markedly superior in two patients and slightly superior in the third).

Although clearly a small study, the work by Koide T., et al., 1994 does provide proof-of-concept for Revive Therapeutics in the planned Phase 2 study. The authors concluded, "Bucillamine can dissolve cystine approximately twice as effective as tiopronin at the same mg amount."

Market Opportunity For Revive Therapeutics

There is a mountain of clinical safety and tolerability data on bucillamine from the three decades of use in Japan and Korea. Revive has previously studied the drug in a Phase 2a trial in 74 patients with gout, demonstrating efficacy on par, if not superior to Takeda's Colcrys® (colchicine) (see below). Proof-of-concept has been demonstrated in cystinuria in a small study in Japan. This suggests that Revive has both a viable strategy and meaningful opportunity with bucillamine in cystinuria. Above I noted that management will seek to partner the drug for future development in gout.

U.S. sales of Thoila® at Retrophin in 2015 likely totaled between $50 and $60 million (note: Retrophin does not break out individual product sales). Evaluatepharma believes that peak sales for Thoila® will approach $250 million. At constant pricing, this equates to between 2,000 and 2,500 U.S. cystinuria patients on the drug - about half of the target market according to Retrophin management guidance.

In Revive's May 2016 investor presentation, the company lists the total available market opportunity in the U.S. at $500 million. I think this is a fair assumption, as they are assuming 5,000 eligible patients in the U.S. with a listed price of $100,000 per patient per year. As a reminder, Revive has already secured U.S. orphan drug designation from the FDA for bucillamine as a treatment for cystinuria (21).

What's Revive Worth?

Revive will obviously need to confirm the theoretically superior profile of bucillamine in human clinical trials. Nevertheless, with pricing on par to Thiola®, Revive is sitting on a potential $250 million or more drug with bucillamine for the U.S. market and likely another $150 to $200 million outside the U.S. This forecast assume that bucillamine both takes market share from Thoila® and expands the patient population due to superior efficacy and safety/tolerability. Commercialization is likely only four years away, with peak sales likely ten years down the road from today.

Using a hefty discount rate of 40% to account for the early-stage nature of the program and an industry average 5X multiple on sales, I peg the NPV of bucillamine in cystinuria at roughly $30 million. This equates to over 10X the current valuation!

Another way to look at the value of Revive would be to compare the company to other biopharmaceutical companies developing orphan drugs for non-oncology rare diseases. Beyond cystinuria, Revive is also targeting Wilson's disease and Rett Syndrome. One such company that provides an interesting comparable is fellow Canadian biopharma, Bellus Health (BLU.TO). Bellus is developing Kiacta™ (eprodisate) for the treatment of Amyloid A Amyloidosis (Phase 3) and Sarcoidosis (Phase 2). AA Amyloidosis is the abnormal build-up of insoluble fibrillar proteins (amyloid) in specific organs, which eventually leads to organ failure (read more on Bellus >> HERE). Bellus stock has tripled so far in 2016 and now commands a market capitalization of $150 million. Kiacta™ is a $500 million per year opportunity. The drug is in Phase 3 trials. Revive's bucillamine is a similar opportunity in size, with Phase 3 planned for 2017 should the current Phase 2 study go according to plan.

Another interesting comparable is Neurotrope, Inc. (NTRP). Neurotrope was previously developing bryostatin-1 for the treatment of Alzheimer's diseases (in Phase 2b) but has recently shifted focus to rare neurological disorders such as Fragile-X syndrome and Niemann-Pick Type C. The story is reminiscent of Revive, which originally focused on the large-market indication of gout, but has since shifted to rare diseases. Fragile-X is similar to Rett Syndrome (22), which Revive is targeting a Phase 1/2 study with REV-003 (tianeptine) in 2017. Neurotrope is valued at 10X Revive's current value as of today.

Below is a table showing some additional companies targeting rare orphan diseases. Revive's market capitalization is the outlier at $2.5 million. Keep in mind, assuming the Phase 2 trial goes according to plan later this year, and Revive will be in Phase 3 in 2017. I believe the U.S. FDA will require only one Phase 3 trial for bucillamine, so management could be in the position to file the New Drug Application (NDA) in 2018.

But investors may not have to wait around for 2018 to see substantial returns. Small companies developing drugs for orphan diseases often get acquired. The major players in this area such as Shire, Genzyme (Sanofi) have plenty of cash and are no stranger to dealmaking. Shire alone has done four deals in the past year, including Baxalta, Dyax, NPS, and Meritage. Revive's goal is to complete the planned Phase 2 trial and then engage with potential licensors or acquires of bucillamine in 2017. I would not be surprised if Retrophin is one such company keeping a close eye on Revive's progress.


I think Revive's stock is artificially depressed for a number of reasons.

- Firstly, it's relatively unknown in the U.S. Canadian biopharma companies typically trade at a discount to their U.S. brethren, which often creates intriguing investment opportunities (see my initial reports on Cynapsus Therapeutics and Bellus Health).

- Secondly, Canadian securities law mandates that firms must announce they are seeking to raise capital before they close the transaction, a backward process from the U.S. and one that typically depresses Canadian stocks prior to the transaction (again, see Cynapsus Therapeutics prior to the U.S. IPO).

- Thirdly, until recently, Revive was focused on the treatment of gout with bucillamine. The gout indication is significantly larger than cystinuria, but far more crowded and dominated by some very large players, including Takeda, AstraZeneca, Pfizer, J&J, and Eli Lilly. It will cost far too much money for Revive to compete in this space and the story just did not resonate with investors.

- Finally, Revive has very little cash - only $0.8 million on hand as of March 31, 2016; but then again, that's what the $1.5 million best-efforts private placement will fix. Revive is looking to raise enough cash to fund the Phase 2 trial in cystinuria. It's a change in strategy, but one that I think could really pay off for the company.

Investors should watch for three things over the near-term. The first is if Revive can close its announced private placement. If the company can raise $1.5 million - at a market value today of only $2.5 million - that's a great sign. It's a sign that the new strategy to target rare diseases like cystinuria resonates with investors and that funds see an opportunity here.

The second is the announcement from the company that the U.S. IND filing for cystinuria has been accepted by the FDA. This clears the way for the initiation of the U.S. Phase 2 study and tells me the U.S. FDA has no issues with the long history of bucillamine use in Japan and Korea.

The final announcement is the initiation of the Phase 2 cystinuria study. This tells me management can execute and meet stated timelines and goals. If Revive can hit on these things over the next few months, I think we are looking at a major move up for the stock.


This article was written by Jason Napodano, CFA of BioNap, Inc. 
Please be sure to read our Disclaimer.


  1. Jason, How does one participate in the $1.5M stock offering?

    1. Please contact me through DM on my Twitter or email (