Brinson Patrick Starts Rexahn Pharma (RNN) at Market Perform; Several Catalysts Upcoming in FY14

Brinson Patrick has started coverage on Rexahn Pharmaceuticals (AMEX: RNN) at Market Perform and one-year price target of $3.

Analyst Christopher James believes Rexahn has a potential best-in-class Akt-1 inhibitor with Archexin. A small Phase IIa study demonstrated that treatment with Archexin in combination with gemcitabine provided a median survival of 9.1 months compared to the historical survival rate of 5.65 months in patients with advanced pancreatic cancer, the analyst noted.

James also sees multiple catalysts for Rexahn in 2014. Major clinical milestones for 2014 include additional data from the ongoing Phase I study with Supinoxin in 4Q:14. As a reminder, Rexahn recently reported encouraging initial results from this ongoing study. Importantly, one patient has received a full 6 cycles, and a fourth dosing cycle (150 mg) has been initiated ... We also expect RNN to complete the safety component of the Phase IIa study with Archexin in 4Q:14, and conclude patient enrollment in the Phase I study with RX-3117 in the 4Q:14/1Q:15 timeframe. Although we do not usually project timelines for deals, Rexahn appears confident that it can establish a corporate partnership for RX-3117 in mid-2014, the analyst said.

Pipeline summary:

-- Supinoxin (RX-5902): Phosphorylated p68 RNA helicase inhibitor. A Phase I clinical trial in cancer patients with solid tumors initiated August 2013.
-- RX-3117: Next generation cancer cell specific nucleoside analog. Completed European exploratory Phase I trial in cancer patients with solid tumors. Phase Ib clinical trial in cancer patients initiated in January 2014.
-- Archexin: Akt-1 inhibitor completed an exploratory Phase IIa clinical trial in pancreatic cancer. A Phase IIa clinical trial in cancer patients with metastatic renal cell carcinoma initiated January 2014.
-- Nano-Polymer-Drug Conjugate System (NPDCS).
-- RX-21101: polymer conjugated form of docetaxel containing a signaling moiety which directs the drug into the tumor maximizing efficacy and minimizing toxicity.
-- Lipid-Coated Albumin Nanoparticle (LCAN).
-- RX-0201-nano: nanoliposomal Akt-1 inhibitor, similar to Archexin.

James noted that Rexahn has about $40 million of cash on hand following a recent equity raising round of $20 million and burns about $1 million per month on operations.

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