Rexahn Pharma (RNN) just announced that it had formed a partnership deal with BioSense Global LLC. This is a very important partnership for Rexahn, which has been struggling quite some time with some of its other clinical cancer products. I believe that this collaboration is a very good turning point for the biotech, because it gets assistance from BioSense to get the product to the greater China territory. In addition, it provides some cash milestones so that Rexahn can possibly avoid having to dilute shareholders at an earlier period than expected. Even better, the deal will allow new cancer target indications for RX-3117. In other words, target indications that Rexahn itself is not targeting. 

The premise of the agreement is that BioSense obtains the exclusive licence to develop and commercialize RX-3117 in Greater China. That's a good thing, because Rexahn will not need to provide any funding for clinical trials costs for these studies done by BioSense. Rexahn is expected to receive an upfront payment in consideration for this deal, however, for the time being the exact amount has not yet been revealed. What is known is that it will be eligible to eventually receive $226 million in regulatory and commercial milestone payments for products generated from RX-3117. The biotech will also obtain low to double digit royalty for sales of any of these products as well. Both companies will look to explore the drug in pancreatic cancer and other cancer indications. However, BioSense is looking at initiating phase 2 studies for up to three different cancer indications. 

RX-3117 has made significant progress on its own in the clinic. Rexahn currently has two ongoing phase 2 studies using RX-3117. These two phase 2 studies are using the drug to treat metastatic pancreatic cancer and advanced bladder cancer. I like that it is going after both of these indications, because they deal with populations with a high unmet medical need. Despite advancements in science, those who are diagnosed with pancreatic cancer still don't have a highly effective treatment option. To date, standard of care for patients with pancreatic cancer treatment involve different types of chemotherapy. Sometimes it is even given in a mix of chemotherapy agents. 

Rexahn is not a one hit wonder. It has been able to already establish a partnership with Merck (MRK) for its other clinical cancer product known as RX-5902. However, this partnership is a little different. For the time being, it is an exploratory phase 2 study. Both companies are trying to see if a combination of RX-5902 and Keytruda can adequately treat patients with metastatic Triple-negative breast cancer. Merck is supplying the product Keytruda and Rexahn is responsible for the study. Despite not receiving any cash for this deal, I believe it is still a good one. The reason why I state that is because if the combination proves to increase overall survival or progression-free survival then it is highly likely that Merck will incorporate a new deal with upfront cash. 

The risk with Rexahn Pharma is that it doesn't have many clinical products left in its pipeline. Besides RX-3117 and RX-5902 in phase 2 studies, it has a preclinical product known as RX-0301 to treat patients with hepatocellular carcinoma (liver cancer). It has another developmental stage product in earlier testing known as RX-0201 but that has yet to be tested in preclinical studies. A second risk to keep an eye on would be the low cash position. It stated that it had $19.8 million in cash as of March 8, 2019. The problem is that at that time, it noted that its cash would be enough to fund operations for at least the next 12 months. Biotechs don't wait until the last minute to raise cash, that means I predict a cash raise in the coming months. Especially, since it just performed a 1 for 12 reverse stock split last week. That means it would be more logical to probably wait till after a cash raise to enable a position. Yes, BioSense stated that they gave an upfront payment of cash but the amount was not disclosed. Therefore, it is better to be on the safe side and be cautious. I believe that Rexahn is starting to find its stride after this latest partnership deal. It now has two solid deals to build on and if both products end up working out then the stock will finally find the success it has been looking for after many years of hardship.