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Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Investor Reaction

This post is part of 9 a 16 part series of posts taken from the transcript of an interview I (JL) conducted with Resverlogix (RVX.TO) co-founders Dr. Norman Wong (NW) and Donald McCaffrey (DM).

What follows is a lengthy and candid interview about the history of Resverlogix, recent events at the American Heart Association meetings, and future plans for the company.

I’ll be publishing two interview segments a day so not all of the links may be active if you are viewing this near the end of March 28-April 5, 2011.

  1. Background of Dr. Norman Wong

  2. Early History of Resverlogix

  3. HDL Biology

  4. American Heart Association Meeting – 2010

  5. CETP History

  6. Importance of HDL Type

  7. AHA ASSERT Trial Response

  8. ALTs

  9. Investor Reaction

  10. The Next 2 Years

  11. David vs. Goliath

  12. Alzheimer’s Therapy Potential

  13. Upcoming Assure Trial

  14. Volatility of Resverlogix

  15. Resverlogix is Expanding

  16. More on the sell-off


Part 9

JL: I have to assume that your investors knew a lot about, and probably should have been

able to interpret these results, right?

DM: Depends. If you're talking a retail investor, no. They don't really understand it, because
there are so many numbers and figures and high end science. If you're talking institutional
investors with analysts that are Ph.D.s, MDs, oh yeah. And when the stock dropped, there's
a reason 35 million shares sold over a two-week period, because institutions were very eager
and glad to be buying these shares. It's an unfortunate scenario, but the guys who have the
scientists on board at their beck and call looked at this opportunity like, "Holy smokes guys
it’s a great buying opportunity". I'll equate it to a saying that Warren Buffett has used, that
the stock market is an interesting store. It's the only place he knows of that when there's a
sale on, everybody runs from the building screaming.

JL: What about, because there was some selling the day before your results came out, did
the TSX investigate that?

DM: Issues regarding investigations on either side of the border I can't comment on. I would
say, "Hoorah. About time." I would also be confident that the selling was none of my guys,
because we're sitting there with a embargoed draft news release from Cleveland Clinic in
hand, one with a great and accurate title. We were expecting the stock to shoot through the
roof. Then Bloomberg puts out an inaccurate article prior to our session, and the stock goes
the other way. Well, who knew what and when? That's an interesting question that I hope we
all get an answer to.

JL: The good news is it's getting easier and easier to trace that stuff because they'll know
who made the trades, and they can track it.

DM: I would assume that someone's in some big trouble over that.

NW: The rationale for our excitement is when you do a clinical trial of this nature, you do it
to learn. As Don has said, we looked for specific things, and we found a lot.

DM: It's exciting what we learned.

NW: We learned tons.

DM: But we got our nose rubbed in it as if this new knowledge was supposed to be bad, but
it was actually very good.

NW: So what we learned ASSERT to help us in the ASSURE trial design is that we should
target low and intermediate dose statin population. We will also target those with low levels
of HDL. And by doing so, we will pick the population in which our drug will be probably
the most beneficial. And secondly, we always avoid all of those things that the press were
concerned about, the ALT signals. Even though it's not due to our drug.

DM: We're golden when we show that. We're not concerned. It works well with the statins.
It works well on its own. It's reducing plaque. Statins can only stop plaque from building up
further. Ours actually removes the plaque. A $35 billion market was built on just maintaining
and we can now remove plaque. It's interesting that certain big pharmas seem to be really
going out of their way to try to stifle us. I mean, they must be a little nervous.

JL: Yeah. They didn't have to for sure. I was surprised, because I don't follow biotech news
that closely, but some of the quotes that I saw, it was like, wow! Because I did have
some knowledge from previous conversations and I thought "These are the numbers . . ."
Everything seemed to be in place.

DM: It is.

JL: I was quite bewildered.

NW: We were, too.