UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): February 17, 2015
REGENERX BIOPHARMACEUTICALS,
INC.
(Exact name of registrant as
specified in its charter)
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Delaware |
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001-15070 |
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52-1253406 |
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(State or other jurisdiction
of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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15245 Shady Grove Road, Suite 470
Rockville, MD |
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20850 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone
number, including area code: (301) 208-9191
Not Applicable
(Former name or former address,
if changed since last report.)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01. | Regulation FD Disclosure. |
On
February 17, 2015, the Company issued a press release announcing the posting of a letter to shareholders issued by Company. A
copy of the letter is furnished as Exhibit 99.1 to this Current Report.
Forward-Looking
Statements
Any
statements in this shareholder letter that are not historical facts are forward-looking statements made under the provisions of
the Private Securities Litigation Reform Act of 1995. Any forward-looking statements involve risks and uncertainties that could
cause actual results to be materially different from historical results or from any future results expressed or implied by such
forward-looking statements. Forward-looking statements in this shareholder letter include, but are not limited to, statements
regarding our strategic, licensing, and research partnerships, future royalty and milestone payments, regulatory applications
and approvals, the development of our drug candidates, the use of our drug candidates to treat various conditions, our growth
strategy, and our financial needs. The proposed clinical trials and costs and resources to support such trials, as well
as the other forward-looking statements, are expectations and estimates based upon information obtained and calculated by the
Company at this time and are subject to change. Moreover, there is no guarantee any of these trials will be successful or
confirm previous clinical results. Please view these and other risks described in the Company’s filings with the Securities
and Exchange Commission (“SEC”), including those identified in the “Risk Factors” section of the annual
report on Form 10-K for the year ended December 31, 2013, and subsequent quarterly reports filed on Form 10-Q, as well as other
filings it makes with the SEC. Any forward-looking statements in this shareholder letter represent the Company’s views only
as of the date of this release and should not be relied upon as representing its views as of any subsequent date. The Company
specifically disclaims any obligation to update this information, as a result of future events or otherwise, except as required
by applicable law.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit |
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Number |
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Description |
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99.1 |
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Shareholder Letter, dated February 17, 2015. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
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REGENERX BIOPHARMACEUTICALS, INC.
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By: |
/s/ J.J. Finkelstein |
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J.J. Finkelstein |
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President and Chief Executive Officer |
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Date:
February 18, 2015
EXHIBIT INDEX
Exhibit |
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Number |
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Description |
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99.1 |
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Shareholder Letter, dated February 17, 2015. |
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Exhibit 99.1 |
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15245
Shady Grove Road
Suite 470
Rockville, MD 20850|
301.208.9191 |
February 17, 2015
Dear Shareholder:
Having just completed a very important licensing and joint venture
agreement to more rapidly move our ophthalmic drug candidate forward in the U.S., we would like to take this time to report on
the status of RegeneRx and the exciting prospects for both the short term and long term future of our company. This letter is intended
to be a top-line synopsis, rather than a comprehensive analysis, of the various partnerships in which we are engaged as well as
our operations and future direction. We will also identify key clinical milestones and inflection points from now through 2016.
We reserve the right to modify our goals and expectations from time to time in accordance with clinical development, partnering
activities, access to capital markets, and the general climate in the pharmaceutical industry.
For the past several years, RegeneRx has been implementing a
strategy to leverage our clinical assets by engaging in product development and commercial partnerships, given our limited access
to capital. During this period, we continued to support research and development with Thymosin beta 4 (Tβ4) by working with
more than 50 leading academic and medical institutions in the U.S. and Europe to conduct research intended to supplement and/or
expand our clinical efforts. As a result, our clinical progress and partnering activities have progressed in a manner that now
enables us to move expeditiously toward product commercialization.
Product Development
and Commercialization Deals
In an effort to expedite product development, while mitigating
risk, in 2012 we embarked on a strategy to out-license rights to our product candidates in markets that would be difficult or impossible
for us to develop internally. This led to the out-licensing of certain product candidates in China, Korea, Japan, and Australia,
among other Asian countries, as well as in the U.S.
In 2012 we licensed to Lee’s Pharmaceuticals, a successful
and fast-growing Chinese pharmaceutical company, the rights to develop and commercialize our Tβ4 products in China, Hong Kong,
Macau and Taiwan. In return we received an up-front licensing fee, the right to commercial milestone payments, and a tiered royalty
stream if Lee’s is successful in bringing a product to market. Lee’s is responsible for all clinical development and
commercialization activities in their territory; therefore, we believe RegeneRx has an opportunity for value enhancement without
capital risk to RegeneRx or dilution to stockholders. In the summer of 2014, after review of all of our FDA filings, preparation
of a clinical dossier and manufacturing development, Lee’s filed an IND with the Chinese FDA to conduct a Phase II, dose-response
study in mainland China in patients with dry eye syndrome. As many of you know, there is a growing and significant pollution problem
that is often an underlying cause of dry eye and other related disorders that affect large urban populations in China. Lee’s
is awaiting regulatory approval to begin the study, which they expect to receive soon.
5 | Page
In 2014, we licensed to G-treeBNT (G-tree), a Korean pharmaceutical
company, the rights to develop and commercialize RGN-259 (RegeneRx’s preservative-free eye drop) in Korea, Japan, Australia
and a number of other countries in Asia that we refer to as the Pan Asian rights. These rights exclude China, Hong Kong, Macau
and Taiwan, which are held by Lee’s. In return we received an up-front licensing fee and G-tree purchased equity in RegeneRx,
totaling $2,350,000. We also licensed G-tree the rights to develop RGN-137 (RegeneRx’s dermal wound healing product), in
the U.S. for Epidermolysis Bullosa (EB), an inherited orphan indication causing blistering of the skin. G-tree has assembled an
impressive team with strong product development expertise in the pharmaceutical industry in Korea.
It is important to recognize the complexity of development activities
in moving a drug candidate from Phase II to Phase III, whether in Asia or in the U.S., including optimizing product packaging,
stability and sterilization, and other related tasks required for commercial manufacturing. This requires significant capital,
time, and expertise and must be performed within strict regulatory guidelines called Good Manufacturing Practices. I’m pleased
to report that G-tree has been vigorously, and successfully, performing this work in preparation for clinical trials in
Korea. Moreover, this effort will now be very important for development of RGN-259 in the U.S., as discussed below. In December
2014, G-tree filed an IND for a Phase IIb/III clinical trial for RGN-259 in Korea and is expected to enroll patients later this
year.
In January of 2015, we created a joint venture with G-tree (ReGenTree
LLC) to develop RGN-259 in the U.S. for dry eye syndrome (DES) and neurotrophic keratopathy (NK), an orphan condition of the cornea.
We chose to enter this relationship for several reasons, including demonstration by G-tree of technical and product development
competency and a willingness to put forth the necessary time, effort, and capital, as indicated by their efforts to date in Korea.
Moreover, much of the manufacturing work discussed above is directly applicable to commercialization of RGN-259 in the U.S. so
many of the tasks are completed and will not have to be replicated, saving a significant amount of time and money.
We believe the joint venture is a uniquely appropriate structure
within which to develop RGN-259. RegeneRx will own a significant portion of the equity of ReGenTree while G-tree will earn additional
equity based on achievements of critical developmental milestones. We will receive an up-front payment of $1 million, payable in
two tranches: (i) within forty-five business days after closing and (ii) within forty-five business days after enrollment of the
first patient in an ophthalmic trial in the U.S. RegeneRx will also receive a single to double digit royalty on any commercial
sales by ReGenTree or a sublicensee. We estimate RegeneRx’s equity ownership in ReGenTree, along with our royalty rights,
will result in a share of the eventual commercial value of the joint venture of 40% (or higher depending on whether and when RGN-259
is licensed or sold to a third party), or if it is commercialized internally through the joint venture. We estimate that the cost
for development of RGN-259 for NK and dry eye syndrome in the U.S. is $25 - $30 million and we structured the joint venture so
that RegeneRx has no financial obligations throughout the entire development process through receipt of NDA approval, and there
is no sale of RegeneRx equity associated with this partnership. Moreover, RegeneRx has significant control over major decisions
within ReGenTree, such as commercialization strategy, mergers, acquisitions, etc. Given that the value of the dry eye market in
the U.S. is approaching a billion dollars per year, we believe this is an excellent opportunity to effectively develop RGN-259
in the U.S. with a partner that has the interest, expertise and financial capabilities to achieve timely success, without financial
obligation or risk to RegeneRx.
6 | Page
Critical Clinical
Milestones
During the next 24 months we and our partners expect to reach
numerous clinical milestones in countries throughout the world, all of which we believe should add significant value to RegeneRx.
| · | In China, we expect initiation of Lee’s Phase II clinical trial
in dry eye before Q3 of this year with results in late 2015 or early 2016; |
| · | In Korea, we expect initiation of G-tree’s Phase IIb/III trial
in dry eye this year with results in 2016; |
| · | In the U.S., we expect initiation of ReGenTree’s Phase III trial
in neurotrophic keratopathy this year with results in late 2015 or early 2016; |
| · | In the U.S., we expect initiation of ReGenTree’s Phase II trial
in dry eye later this year with results in 2016. |
Market for RGN-259
in the U.S. and China
The current worldwide dry eye market is estimated at $1.9 billion
per year, expanding to $2.8 billion by 2017. To date, only one pharmaceutical product has been approved in the U.S. for dry eye
syndrome and commands annual sales exceeding $700 million. Patients often experience burning and stinging from use of the drug,
which commonly takes six months of use until efficacy is seen. The package insert indicates that clinical trials have demonstrated
that the product is effective in 15% of patients vs. 10% for placebo.
Clinical data for RGN-259 shows that its effects are achieved
within days, that there is no burning or stinging and that it can significantly improve both the signs and symptoms of dry eye,
which represent the current standards required by FDA for approval of new products for dry eye.
In China, a quickly expanding economy has led to severe pollution
in its urban areas and to a rapidly expanding incidence of dry eye symptomology among its population. It is believed that the market
share for drugs for these indications is around 36% of China’s ophthalmic drug market with an estimated market value of approximately
$1.7 billion in 2012 and a projected growth rate of 12% annually through 2020.
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NK is an orphan disease with a U.S. prevalence far below the
statutory threshold of 200,000 diagnosed cases. We are not aware of point-prevalence epidemiology data for the U.S.; however, available
incidence data from Europe – a population demographically similar to the U.S. – strongly support a low U.S. prevalence.
Based on an average NK prevalence of 6% of all cases of herpetic keratitis, the NK prevalence can be estimated as 0.89/10,000 or
approximately 28,000 patients in the U.S. and a similar number in the EU. On December 31, 2013 the FDA granted orphan status for
Tβ4 for the treatment of NK in the U.S.
Operations and Future
Plans
Currently, RegeneRx has active partnerships in three major territories:
the U.S., China and Pan Asia. Our partners have been moving forward and making significant progress in each territory and are prepared
to initiate their clinical trials programs this year. In each case, the cost of development is being borne by our partners with
no financial obligation for RegeneRx. Patient accrual, treatment, and follow-up for the ophthalmic trials are relatively fast,
as opposed to most other clinical efforts, so data should be forthcoming in months, not years, after patients begin enrollment.
We, therefore, should be able to maintain our existing operations at the current level while we await results from these trials
and continue to seek additional partnership opportunities.
We still have significant clinical assets to develop, primarily
RGN-352 (injectable formulation of Tβ4 for cardiac and CNS disorders) in the U.S., Pan Asia, and Europe, and RGN-259 in the
EU. Our goal is to wait until the results are obtained from the current ophthalmic clinical trials before moving into the EU with
RGN-259. If successful, this should allow us to obtain a higher value for the asset at that time. However, we intend to continue
to develop RGN-352, either by obtaining grants to fund a Phase IIa clinical trial in the cardiovascular or central nervous system
fields or finding a suitable partner with the resources and capabilities to develop it as we have with RGN-259.
Our current cash, together with the payments we expect to receive
under our recent joint venture total approximately $1.7 million. Based on our preliminary operating budget, we believe we have
funds to last well into 2016. This estimate does not include receipt of any funds from grants, new partnerships or the raising
of additional capital if the market climate warrants.
Investor Relations
Now that we have partners with significant ongoing efforts and
resources in the U.S., China and Pan Asia and important clinical milestones on the near-term horizon, we intend to spend additional
effort on investor relations in order to present our story to a broader retail market, as well as to institutional investors and
analysts. It is our belief that the market valuation of RegeneRx at $15-$20 million is far below comparable companies as well as
those with product candidates in much earlier stages of clinical development. We also believe that if we can effectively present
RegeneRx as a company that has worldwide product opportunities in advanced clinical trials for both large markets and orphan disorders,
with near term clinical milestones and little financial risk to RegeneRx, we would appeal to a broad spectrum of investors in the
biopharmaceutical space.
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Conclusion
We believe RegeneRx has a compelling combination of assets,
partners, and products in late stage clinical development worldwide for medical disorders with unmet needs that offer the potential
for significant revenue generation in a relatively short period of time. Starting this year, and over the next twenty-four months,
RGN-259 should be reaching important milestones starting with the initiation of a Phase III trial in the U.S. for the orphan eye
disease, NK, a Phase IIb/III trial in Korea for dry eye, and a Phase II dose response trial in China also for dry eye, all of which
should be completed and producing patient data within months of enrollment of the first patients. We believe each trial will generate
attention and enthusiasm among patients, physicians, and investors and, upon success, help increase the value of our company to
a level we believe is consistent with the clinical stage and potential of our product portfolio. We are very appreciative of the
support and patience of our shareholders and are pleased to share our recent good news with you.
Best
regards, |
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J.J. Finkelstein |
Allan L. Goldstein, Ph.D. |
President & CEO |
Chairman and Chief Scientific Advisor |
Forward Looking Statements
Any statements in this shareholder letter that are not historical
facts are forward-looking statements made under the provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking
statements involve risks and uncertainties that could cause actual results to be materially different from historical results or
from any future results expressed or implied by such forward-looking statements. Forward-looking statements in this shareholder
letter include, but are not limited to, statements regarding our strategic and research partnerships, future royalty and milestone
payments, regulatory applications and approvals, the development of our drug candidates, the use of our drug candidates to treat
various conditions, our growth strategy, and our financial needs. The proposed clinical trials and costs and resources to support
such trials, as well as the other forward-looking statements, are expectations and estimates based upon information obtained and
calculated by the Company at this time and are subject to change. Moreover, there is no guarantee any of these trials will be successful
or confirm previous clinical results. Please view these and other risks described in the Company’s filings with the Securities
and Exchange Commission (“SEC”), including those identified in the “Risk Factors” section of the annual
report on Form 10-K for the year ended December 31, 2013, and subsequent quarterly reports filed on Form 10-Q, as well as other
filings it makes with the SEC. Any forward-looking statements in this shareholder letter represent the Company’s views only
as of the date of this release and should not be relied upon as representing its views as of any subsequent date. The Company specifically
disclaims any obligation to update this information, as a result of future events or otherwise, except as required by applicable
law.
9 | Page
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