Rexahn, Pipeline Updates, Q2 Financial Review, Analysts Target Price

Rexahn Pharmaceuticals Inc. (NYSE MKT: RNN) is a clinical-stage biopharmaceutical company dedicated to developing novel, best-in-class therapeutics for the treatment of cancer.

The company has three primary drug candidates (detailed below). All three are in Phase II clinical trials.


Recent developments:

Updated Clinical Data on RX-3117 Presented at the American Society of Clinical Oncology (ASCO) Annual Meeting

Preliminary data on the first ten patients from the Phase IIa study in advanced and metastatic bladder cancer were presented at the American Society for Clinical Oncology meeting, in June.  The study met the predefined efficacy criteria of an increase in progression free survival of greater than 4 months, allowing for the enrollment of additional patients. In addition, two patients had a reduction in tumor size of 19% and 15%. Fifty-percent (50%) of the patients had stable disease for greater than 50 days. RX-3117 treatment was well tolerated with no dose-limiting toxicities. Rexahn will be presenting additional clinical data from this trial during the third quarter of 2017.

Patent Protection for RX-3117 Strengthened

Rexahn announced in July that the U.S. Patent and Trademark Office has issued a Notice of Allowance for a U.S. patent application that covers indications, dosage regimens and the pharmacokinetic profile for RX-3117.  The patent is expected to provide additional exclusivity through 2036.

Completed $10 Million Registered Direct Offering

In June, the Company completed a registered direct offering with institutional investors to purchase approximately 3.03 million shares of its common stock and warrants exercisable for up to approximately 1.52 million shares of its common stock for gross proceeds of $10 million.  The net proceeds of the offering will be used to advance our clinical development programs.

Reverse stock split

In May, each 10 shares of issued Common Stock were converted into one share of Common Stock. The reverse stock split reduced the number of shares of outstanding Common Stock from approximately 254 million, to approximately 25.4 million and the number of shares of Common Stock the Company is authorized to issue was reduced from 500 million to 50 million.


Products in clinical development:

RX-3117 is an oral prodrug activated by the enzyme Uridine Cytidine Kinase, or ‘UCK2’, which is only present in cancer cells. Once activated by UCK2, RX-3117 inhibits DNA and RNA synthesis leading to cancer cell death. Because UCK2 is overexpressed in multiple human tumors – but has a very limited presence in normal tissues, RX-3117 offers the potential for a targeted anti-cancer therapy with an improved efficacy and safety profile.

Supinoxin (RX-5902) is an orally administered, potential first-in-class, small molecule inhibitor of a unique cancer protein – phosphorylated-p68 (P-p68) which is selectively overexpressed in cancer cells and absent in normal tissue. P-p68 is believed to increase the activity of multiple cancer related genes including, cyclin D1, c-jun and c-myc, and play a prominent role in tumor progression and metastasis. Over-expression of P-p68 has been observed in many solid tumors, including, melanoma, colon, ovarian and lung tumors.

Archexin is a unique antisense oncology drug candidate that specifically inhibits the cancer cell signaling protein Akt-1, which is highly overexpressed in cancer cells. Archexin is the only specific inhibitor of Akt-1 in clinical development. The activated form of Akt-1, which is involved in cancer cell growth, survival, angiogenesis, and drug resistance, has been shown to be present or elevated in more than 12 different human cancer cell lines, including pancreatic and renal cell carcinoma.


About Rexahn Pharmaceuticals, Inc.

Rexahn Pharmaceuticals Inc. (NYSE MKT: RNN) is a clinical-stage biopharmaceutical company dedicated to developing novel, best-in-class therapeutics for the treatment of cancer. Rexahn’s product candidates work by targeting and neutralizing specific proteins believed to be involved in the complex biological cascade that leads to cancer cell growth. The Company has a broad oncology pipeline that includes three anti-cancer compounds currently in clinical development: RX-3117, Supinoxin™, and Archexin®, and a novel nanopolymer-based drug delivery platform technology that may increase the bio-availability of FDA-approved chemotherapies.


Q2 2017 financial results

Cash and Investments: Rexahn’s cash and investments totaled approximately $26.8 million as of June 30, 2017, compared to approximately $20.3 million as of December 31, 2016. The increase in cash and investments during the six months ended June 30, 2017 was primarily due to $9.4 million in net proceeds from the registered direct offering in June 2017, and $5.4 million of proceeds from stock warrant and option exercises, offset by $8.3 million of cash used in operating activities. Rexahn expects that its cash and investments as of June 30, 2017 will be sufficient to fund the company’s cash flow requirements for its current activities into late 2018.

R&D Expenses – Research and development expenses were approximately $2.5 million for the three months ended June 30, 2017, compared to $2.2 million for the three months ended June 30, 2016.  Research and development expenses for the six-month periods ended June 30, 2017 and 2016 were $4.8 million and $5.7 million, respectively.

G&A Expenses – General and administrative expenses were approximately $1.7 million for the three months ended June 30, 2017 and 2016.  General and administrative expenses for the six-month periods ended June 30, 2017 and 2016 were $3.4 million and $3.0 million respectively.

Net Income (Loss) – Rexahn’s loss from operations was approximately $4.3 million and $3.9 million for the three months ended June 30, 2017 and 2016, respectively. Rexahn’s net income was $0.9 million, or $0.04 per basic share, for the three months ended June 30, 2017, compared to a net loss of $1.8 million, or $0.08 per share, for the three months ended June 30, 2016.  For the six-month period ended June 30, 2017, Rexahn’s net loss was $20.7 million, or $0.83 per share, compared to a net loss of $5.9 million, or $0.28 per share, for the six months ended June 30, 2016.   Included in the net income (loss) for the three months ended June 30, 2017 and 2016, is an unrealized gain on the fair value of warrants of $5.5 million and $2.1 million, respectively.  The fair value adjustments are non-cash charges and are primarily a result of changes in stock price between reporting periods.


Stock drivers and risk factors

Positive data from clinical trials could be a catalyst;

The company has no product revenues, has incurred negative cash flows from operations since inception and may need to raise additional capital;

They must find suitable partners to help research, develop and commercialize new drug candidates;

Regulatory approval is needed for their drug candidates.


Analyst’s opinion

In June 2017, Rodman & Renshaw analyst, Joseph Pantginis, who sees beneficial opportunity for bladder cancer patients and is bullish on the firm’s pipeline drug, reiterating a Buy rating on shares of RNN with a $19.50 price target.

Pantginis elaborated, stating “Regarding the next catalyst, we expect Phase 2a data for RX-3117 in metastatic pancreatic cancer in mid-2017, and while it is a risky indication, should deliver on early responses, in our belief,”


Stock chart

On August 29, 2017, RNN shares closed at $2.49 (+28.35%) at  on volume of 858 thousand shares. The current RSI (14) is 67.78.

RNN shares are trading below their 50-day and 200-day moving averages of $2.29 and $2.83 respectively.



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