IntelGenx Technologies Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 14, 2023

There are 14 speakers on the call.

Operator

Greetings, and welcome to the IntelGenx Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Mr.

Operator

Stephen Kilmer, and Relations at IntelGenx. Stephen, you may begin.

Speaker 1

Thank you. Good afternoon, everyone, and thank you for joining us on today's call. With me on the line are Dwight Gorham, IntelGenx's CEO Andre Godin, our President and CFO Doctor. David Kadikl, The company's SVP and Head of Corporate Development and Strategic Alliances Doctor. Frank Piantraantonio, our Director of Clinical Research Tommy Kenny, our Senior Vice President and General Counsel and Doctor.

Speaker 1

Horst Zerbe, IntelGenx's Chairman. Before we begin, I would like to remind you that all amounts mentioned today are in U. S. Dollars unless otherwise mentioned, and today's call may contain forward looking information that represents our Expectations as of today and accordingly are subject to change. We do not undertake any obligation to update any forward looking statements except as may be required by the U.

Speaker 1

S. And Canadian securities laws. A number of assumptions were made by us in preparing these forward looking statements, which are subject to risks and results may differ materially. Details on these risks and assumptions can be found in our filings with the U. S.

Speaker 1

And Canadian Securities Commissions. I would now like to turn the call over to Mr. Gorham. Dwight?

Speaker 2

Thank you, Steve. Good afternoon, everyone, and thank you for joining us for the IntelGenx Second Quarter 2023 Conference Call. On today's call, I will provide a corporate update and discuss progress we've made on our key pipeline projects. Then Andre will review our financial results. Following that, we will open up the line for your questions.

Speaker 2

So to start, I will now update you on one of our key programs on our key programs beginning with eryzaport. The FDA approval of our 505(2) new drug application for RIZAPORT, the U. S. Market name for RIZAPORT marked a major milestone achievement for the company. It is IntelGenx 1st FDA approval for a film product developed in house Using proprietary Versafilm technology.

Speaker 2

Importantly, the FDA approval included a request That within 2 years we developed a 5 milligram pediatric version of the film and submitted an application for the agency's review and approval. According to a recent issue of practical neurology, migraine affects up to 7,000,000 children and adolescents in the U. S. In addition to reflecting the remarkable impact migraine has on younger individuals, the FDA's request affirms our belief That a film delivered migraine treatment will be valuable to younger patients that have difficulty swallowing pills due to nausea and other factors. The commercialization of Ryzofil in the USA as well as in Spain Is one of our 3 short term commercial objectives we unveiled in May.

Speaker 2

Our U. S. Commercialization partner for RyzaFilm, Gensco Pharma Is planning to achieve the 1st sale of the product later this year with full commercialization in early 2024. Exaltis, our partner for RIZAPORT in Spain continues to await a regulatory approval To implement a new strategy to enable product substitution at the pharmacy level. Based on the positive feedback They have received from prescribing doctors and patients.

Speaker 2

We believe if approved, Axalta's new strategy will boost product sales. We are also pleased to announce that the work of our CDMO business development team Has resulted in a binding term sheet with a CDMO customer with a packaging of pharmaceutical oral film They are planning to commercialize in the United States. The expected agreement It is estimated to generate approximately $9,000,000 in revenue over 3 years and we look forward to providing updates as we work to finalize Such agreement with them. Turning to our other CDMO business, we received In May, an amended drug establishment license from Health Canada that allows us to provide 3rd party testing services Further supporting our short term commercial objective to expand this part of the business. Also on our CDMO business and subsequent to quarter end, we just signed up a customer to engage Sign up a customer to engage on an R and D project with the objective of advancing commercial output.

Speaker 2

We're extremely excited to embark on this new piece of immediate revenue generating business. Changing the subject and turning to our Montelukast program, We are thrilled to announce completion of enrollment in our Phase 2a, Pune clinical trial in patients With mild to moderate Alzheimer's disease or AD. As you may recall, The COVID-nineteen pandemic effectively halted the Buna trial recruitment for a year and a half And the post pandemic restrictions imposed by hospitals posed an additional challenge to trial recruitment. With the intention of avoiding any further delay in achieving the program's goal, we engaged our statistical consultant, COGS stayed limited and determined that we could decrease enrollment while still providing a basis to determine which drug effect Sizes are statistically significant by adjusting the p value to less than 0.1. The study design modifications received a no objection letter from Health Canada and we're pleased to complete and we've completed study enrollment With 52 patients, it was 18 fewer than initially planned.

Speaker 2

We are confident This Health Canada authorized study design modification will enable us to utilize data from fewer patients while optimizing The power of the study to detect the effects of Montelukast Versafilm compared to placebo. We are looking forward to completing the BUNO trial in the Q1 of 2024 and to report initial trial results the following quarter. Believing that Montelukast Versafilm has the potential to be disease modifying not only in AD, But as being currently investigated in immuno trial, but also in the Parkinson's disease, we've expanded the program. In conjunction with that, we recently announced that manufacturing both active and placebo films Are underway in preparation for a multicenter, randomized, double blinded, placebo controlled clinical study to investigate the use of Montelukast Versafilm for the treatment of PD or Parkinson's disease. The study will be conducted at the Karolinska University Hospital under our previously announced research collaboration with Doctor.

Speaker 2

Per Seving Sun, who will serve as the study's principal investigator. Doctor. Savenghi san previously conducted a clinical trial study utilizing the tablet form of Montelukast for the treatment of PD Where 2 tablets of 10 milligram Montelukast were administered twice daily for a total dose of 40 milligrams. The planned study will assess Montelukast in doses exceeding 40 milligrams. So the Montelukast Versafilm offers study participants An attractive dosing alternative to tablets, which would have them required administration of multiple tablets several times per day.

Speaker 2

Doctor. Sevingtson will sponsor the study through a Swedish research grant worth approximately $2,000,000 IntelGenx has the option to acquire, develop IP and study data for our potential further development of Montelukin's Versafilm For the treatment of PD. We are currently expected the study to commence in Q3 2023 And we'll provide more details on its design when they are available. XyroMed. In April, we announced that chemo research through its agent and affiliate XyroMed Received a complete response letter from the FDA for guiding they submitted a abbreviated new drug application For buprenephyrin buprenephyrin buprenephyrin buprenephyrin buprenephyrin buprenephyrin is a generic version of BELBUCA, an opioid that is used to manage pain is fair enough to require daily around the clock long term treatment with an opioid When other pain treatments are inadequate.

Speaker 2

BELBUCA was approved by the FDA in 2015 As applied to the oral or buccal mucosis every 12 hours. The buccal film incorporates our Versa technology in a novel formulation and is designed to be bioequivalent lower cost alternative for Animal Health. As mentioned on our previous earnings call, Our newly appointed Senior VP and Head of Corporate Development Strategy, Doctor. David Kadico is in advanced discussions to engage a potential major animal health partner over a multiyear period. We expect to be able to announce more details on this during the next quarter.

Speaker 2

With that, I would like to now turn the call over to Andre for a review of our financial results. Andre?

Speaker 3

Thank you, Dwight. Good afternoon, everyone. As Dwight mentioned, I'll take a few minutes to discuss the company's financial performance For the Q2 ended June 2023. Let's start with the revenue. The total revenue for the 2nd quarter Amounted to $133,000 compared to $398,000 in the same period last year.

Speaker 3

The change is mainly attributable to decrease in R and D revenue of $260,000 and royalty on product sales of 5,000 Operating costs and expenses were $2,700,000 for Q2 2023, similar to last year's $2,600,000 For Q2 2023, the company had an operating loss of $2,500,000 compared to $2,200,000 in Q2 2022. The adjusted EBITDA was negative $2,200,000 for Q2 2023 compared to negative $2,000,000 for the corresponding 3 month period of 2022. Our net comprehensive loss Was $3,000,000 or $0.02 on a basic and diluted per share basis for this quarter, Down slightly from a net comprehensive loss of $3,200,000 or $0.02 per share for their comparable period of 2022. As at June 30, 2023, the company cash and short term investment totaled 1,300,000 But I would like to also add that I'm presently working on a financing. So and the news should be out shortly.

Speaker 3

So there's Not much detail I can mention at this time, but the cash runway of the company has been taken care of. Right now, we'll now turn the call back to Dwight. Dwight?

Speaker 2

Thanks, Andre. In closing, I'd like to once again recognize our team for executing on our long term strategy. With that, I will now turn the call over for questions. I would like to remind you that our forward looking statements apply to both our prepared remarks and the following Q and A. Thank you.

Operator

Thank you very much. At this time, we are opening the floor up for questions. Thank you. Your first question is coming from Brent Gaethje, who is a Private Investor. Brent, your line is live.

Speaker 4

Yes. Good afternoon, guys. On the last call, I had asked a Question to you guys and Horst and someone else, we're very confident you guys had some short which they indicated were short term catalyst that were going to increase the share price. Maybe we have a different definition of short term, but I would assume that would have meant During the last quarter and nothing seemed to happen. So is that are those no longer in the hopper or are you all just Thinking they just haven't hit yet or kind of what's the deal with that?

Speaker 3

Yes, Brent, it's Andre here. I think that there were some An announcement last week, obviously, about and Dwight covered that, that new CDMO Partnership that obviously generated a lot of volume. But We did mention last quarter that we were going to hit several catalysts. It is still true, but sometimes it takes a little bit more time To materialize, so we're expecting some more news flow in the current quarter and in Q4. So I guess everybody has to be patient, but it's coming.

Speaker 3

It's just like sometimes we think that it might go faster Then it actually is so but it's coming. There is nothing that is any different from the last quarter.

Speaker 4

Okay. Thank you.

Operator

Thank you very much. Your next and is coming from Doug Distler, who is a private investor. Doug, your line is live.

Speaker 5

Yes, thank you. If I may, I'd like to ask 2 questions. My first question is, what is the status of the Tilray arbitration?

Speaker 6

Unfortunately, the answer is similar to last time. The arbitration is confidential by its nature. So We're hoping to have a resolution to this arbitration by the end of the year. That's all I can say at the moment.

Speaker 5

Yes. Okay. Well, it seems like it keeps getting pushed back every time we have an earnings call, but I can appreciate the answer. Also what happened to the joint venture with Aquestive Therapeutics on tadalafil? This joint venture was first announced, I think several years ago and Aquestive Does never provide any updates on the progress on this drug getting through the FDA.

Speaker 5

Is this a dead project or where does it stand? Because it seems like this is a real lost opportunity.

Speaker 7

Hi, this is David. I'll take this. No, thanks for your question. The project is still very much alive. In fact, We're working with Aquestive right now, to embark on the final stages of the project.

Speaker 7

We'll still that will still take some time. We have a commercial partner set as well for in the UK. So by no means is the Project dead, because I am newer to the team, I don't know what was disclosed for time lines. So I'm a little reluctant to give time lines because they all still being worked out. But I would say investors should really consider the tadalafil project more medium to longer term in nature right now as As far as FDA approvals and actual sales are concerned.

Speaker 7

But as far as project developments and moving forward to getting Submission towards the FDA, that is one of the organization's top priorities as we speak.

Speaker 5

Yes. It seems like IntelGenx is more optimistic about it than what Aquestive is because Aquestive, you would think with the potential it has, It would be more in the forefront, but I mean it's they just never mentioned it.

Speaker 7

We can't comment on other companies. All right. Go ahead.

Speaker 3

Just to clarify, the commercial partner is from U. S. I think Just to avoid confusion.

Speaker 5

It's not Aquestive Therapeutics?

Speaker 3

No, no. But I mean the yes, Aquestive is based in the U. S, but a commercial partner that we signed up It's also based in the U. S. Okay.

Speaker 7

Thank you, Andrey. So Andrey, just to clarify, the commercial partner That we've signed up through Aquestive, it's a NASDAQ listed company, but for sales To commercialize, they have rights for the UK. That's what the point was. Yes.

Speaker 3

Thank

Speaker 2

you. But again to reiterate David's point, this is a medium to longer term project. It's in the 2 to 3 year horizon that the commercialization would take place.

Speaker 5

It just seems like it's been out there forever.

Speaker 2

Yes, I understand that.

Operator

Okay. Thank you so much. Your next question is coming from Steve Gee of Wedbush. Steve, your line is live.

Speaker 8

Hello, fellas. All right. So, I'm in a public offering 3 times with the now out of business Santon Finances. Are you guys looking to raise money again to another company?

Speaker 3

Yes. As I mentioned in my intro, we're working on something actually right now as we speak. And we're expecting to announce something shortly. So there's no issue in terms of cash runway for the company.

Speaker 8

And this money going to research? Is this money going to salaries and bonuses for you guys and wives and girlfriends and Anybody else I'd like to hire in that company. Me personally, I don't think it's fair that you guys are getting bonuses. And I've been in the stock for 6 years. And out of the 3 public offerings that I'm into, 2 of them, I lost my warrants now because you guys are taking so long trying to manufacture stuff from Marijuana strips, the cancer strips, the headache medicine, the dog strips, you guys are smoking mirrors again and I hope everybody is listening to this.

Speaker 8

It's the same old, same old stuff. The only announcements we get is up. This guy is retiring. We're hiring somebody new. He comes from 30 years experience from so and so company.

Speaker 8

And it's still the same, 6 years already, I'm still sitting in the stock.

Speaker 3

No, but certainly, I'm sorry. I mean,

Speaker 8

everything is quarter, year, next year. I never hear minutes, days, weeks or I mean, yes, Ed, I'm listening.

Speaker 3

Sir, by the way, we haven't had bonus in a couple of years and we have reduced our salary right now. I don't know what you're asking.

Speaker 8

Why don't you post that then because I don't see none of that. I don't think anybody sees none of that. Okay. I mean, what do you think is going to happen to the stock price after your call with the smoke and mirror thing? What is this going to happen?

Speaker 8

You think it's going to drop from $0.14 down into single digits? Nothing. No crickets there, Just crickets? I don't hear nothing. No answer on that, I don't seem optimistic about this stuff.

Speaker 2

I'm not sure I understood That's exactly what the question was.

Speaker 8

Well, the question is, I've been sitting on the stock for 6 years with 3 public offerings that I'm in. 2 of them, I lost their warrants. And now I'm sitting on I'm all over the place, dollars 0.40 $0.80 We're down to $0.14 today. I'm asking what do you think since you guys work for the company and you have all the big titles, Do you think this stock is going to move anytime soon? Are we going to sit on it for another 6 years?

Speaker 8

I'm just curious because I think after today's smoke and mirror conference call that you guys just pulled again, It's going to drop down to the teens. Nothing positive came out of this what I heard from you guys at all. Everything is next quarter

Operator

Thank you very much. Staff, who is a private investor. Justin, your line is live.

Speaker 9

Thanks. Good afternoon, gentlemen. On the financing That you remarked upon, I know that you cannot expand upon it at great length. However, could you Since you have confidence that it will be accomplished, give us an idea, does it involve issuing of new shares, warrants, is it dilutive, Is it internal people forwarding some loan to the company? Can you give us A little bit of direction there without compromising your need for restriction of information at this moment.

Speaker 3

Yes. There's not much I can say, but what I can say is that, Yes, there will be some dilution, but it will be in most of it We'll be in very strong hands. So for the long term, That is very clear in the process. But the terms, obviously, I cannot Close because they haven't been announced publicly. But we're trying to avoid as much as possible dilution, But we need the money.

Speaker 3

We're going commercial next year, Maybe the end of this year or for sure next year. So we need to get there, and that's what we're doing. We're getting a bridge To get us to the next year.

Speaker 9

Okay. Thank you for that. Thanks. Much appreciated. I think the good part of all of that is you're starting out with not a lot of shares so that You can afford a little bit of dilution and you've been wonderfully adamant about not reversing Shares just to increase the share price in order to get financing.

Speaker 9

So that Whatever the disappointments out there, both those things are certainly appreciated by your shareholders. And I think it evinces integrity on all of your parts. And I for one thank you for that and good luck next quarter.

Speaker 2

Thank you.

Speaker 9

Thank you.

Operator

Thank you very much. Your next question is coming from Tom Miglino, who is also a private investor. Tom, your line is live.

Speaker 10

Thank you very much. Thank you for taking my calls and I think congratulations are in order. I think this was a very exciting quarter. I've been in this stock for Probably 8 or 9 years and it's the most exciting quarter I've seen. So, keep the good news coming.

Speaker 10

I was wondering if you could give us an update on the PEI Project and how that testing is going with the non humans?

Speaker 7

Yes, I can this is David Kadekko here. So the PEI project is underway. In fact, I was out there not too long ago to meet the individual researcher Who was just starting testing in both dogs and eventually cats or the other way around. But we have just commenced That actual R and D or almost clinical trial in animals on that front. There hasn't been any data received today.

Speaker 10

I'm sorry. How when do you expect that you might hear results? Is it something that's imminent?

Speaker 7

No. And that's something more to bridge our longer term entrance into the animal health space. I don't know off the top of my head what the exact timelines are for any data coming through. But what I can tell you too that in Mr. Gorham's prepared remarks, he also mentioned another project that I've taken over since joining the company not too long ago.

Speaker 7

And that if approved and if it goes through, we'll have a lot of legs and potentially material upside to the company. And we hope to give investors in the markets an update on that, as soon as we have one, which we hope That will be within the next quarter.

Speaker 10

So the 2 animal health projects are not related. The one isn't contingent upon the other?

Speaker 7

No, that's correct. They're completely unrelated. One is more of an R and D type study and the other would be R and D going into commercial. Like you mentioned at the outset of your questions here, sir, this was at the University of Prince Edward Island or PEI out in Eastern Canada. The other and that's a university based.

Speaker 7

The other project, which is more commercial and R and D in nature, at least at the outset, That's with an actual company.

Speaker 10

Thank you very much, David. And also has there been any movement in getting We report into other European countries. I know a while ago they were talking about entry into some of the other big four. I know that they're stalled currently in Spain And I'm sure in August not much gets done in Spain. But I wondered if there was any movement on entering other European markets with that product?

Speaker 7

Yes. No, thanks for the question. David here again. I'll take this. The short answer is nothing material to report.

Speaker 7

Even Spain, as you heard in Mr. Goram's Our prepared remarks has been delayed to some extent. In fact, we reported no sales this quarter. We hope that some of the regulatory issues On the ground in Spain will be rectified, but there certainly are other European markets that as part of the corporate development and business development team, We're actively listening to potential opportunities, but nothing right now that we can report that's material.

Speaker 10

Terrific. Well, thank you all very much for taking my call and again congratulations.

Speaker 8

Thank you.

Operator

Thank you. Thank you very much. Your next question is coming from Hugh Kiley, who's a private investor. Hugh, your line is live.

Speaker 11

Yes. Good afternoon, everyone. First question I have on the follow-up to the gentleman's question with Spain. Was there any I know in the last call, they thought they were submitting a new application to the authorities to resolve that packaging or substitution issue, But that's not resolved as of yet?

Speaker 7

That's correct. That's not resolved, as of yet. And I mean, the sales Has shown it. I mean, we there's essentially zero sales in rest of world, for Riza. But at the end of the day as well, I mean, Spain, It's not even one of the top 4 markets in Europe.

Speaker 7

So we are keeping a very close eye on that and speak with our partners, Axaltis for Spain. And if there's any material updates, as always, we would share that with investors in the market.

Speaker 11

So the same issues that affect On one of pharmaceutical and the other partner, I think it's Arvon.

Speaker 7

Arwan, that could Those are Yes. No, that would be separate. Arwan is more for the Middle East and Lebanon in particular, with the goal to, as a gateway to other parts of the Middle East. But those are completely unrelated right now. And we're dealing with R12 with a number of other, I guess, hiccups that we're trying to work through Our contractual agreements.

Speaker 7

But again, I would focus if I'm you and an investor, I think the biggest opportunity Having crunched the numbers and doing this on a near weekly, if not daily basis, Riza USA is by far One of the company's largest opportunities. And that's what we're putting a lot of our efforts into right now. And we have been for the past several months.

Speaker 11

Okay. The validation batches that they completed, they're going through the testing, are they still need to be manufactured?

Speaker 7

We still need to have those manufactured, correct.

Speaker 11

Okay. Thanks. Is that David speaking?

Speaker 7

That's David. Yes.

Speaker 11

Okay, David. Thank you. I'm sure he'll be back in a moment. Question for Andre and the was brought up before Regarding the last conference call and the catalyst near term, could we Peel that back a little bit as a catalyst regarding oral film, transdermal, Vetafilm For the CDMO?

Speaker 3

I mean, there's Like I said earlier, I think we have a few things coming up and all of the above that you mentioned. But those are ongoing agreements that we are We're working on, David is obviously involved, Dwight, everybody is involved. But it's just taking a little bit longer than we expect But it will happen. It's coming. If not in the current quarter, it's going to be in the Q4 for sure.

Speaker 11

Okay. Would they fall into the that name of Significant Catalyst, Andre, As used in the last call?

Speaker 3

They're good catalysts. Everything It's good when you announce a new partnership or your settlement or CMO contract like we just announced last week. So We're working hard on getting these things done.

Speaker 2

Yes. I think bigger part of that rests in The human films and the Vita films. CBT, I don't believe we'll see Major announcements on, what does the announcement? The big ones will be in the human side.

Speaker 11

Okay. Thank you, Dwight. And I don't know if it was covered or any new programs with the tie?

Speaker 3

Not at this time. I mean, we're working on DMT. That's their main Yes. Program with us, but there is discussion, but nothing new on that front.

Speaker 11

Okay. And on the transdermal front, I know the last call and one before there was this Potential opportunities with some discussions going on with a partner for TransDrymple?

Speaker 2

Yes. Those conversations are ongoing. However, the focus Of the organization is really making sure we bring to market Riza, which is approved And we get the proper partnership agreement with that and then resolving the buprenephyrin Issuing getting it resubmitted to the agency, so we can get that to the market as well. Those are the 2 points of call. However, We do have conversations on trends.

Speaker 11

Okay. And the resubmission for the BELBUCA is, I believe from the last call, there was 2 items, 1 for XERAMED and one that was a clarification issue for IntelGenx. Is that one been resolved? It will be

Speaker 2

resubmission to the agency is next week.

Speaker 11

Okay. All right. And The anticipated announcement for the CBD for animal health, is that study completed? Is that still going on? I didn't catch your comments on that, David.

Speaker 7

Yes. So I would say right now, we have 2 active animal health programs, both of which I just mentioned, the The one at the University of PEI, the second being with the company. The other project that I think you're referring to last quarter call or the quarterly call, I believe we had 3 ongoing projects. There was a third. And the recent CBD data In dogs, as reviewed by our R and D team, was not as promising as we thought.

Speaker 7

There might have been a few Experimental errors, we're not exactly sure, but we've decided to pull the plug on that one. So the 2 projects That we have right now in Animal Health are, again, the one in PEI, which is not material from a business standpoint, just to be very clear. That's more going to feed into what data we can present for other potential partners down the road. What the most important projects And revenue generating opportunity that we have existing now is the one that I was referring to with a company that we believe we could be in a position to announce over the coming months?

Speaker 11

Would that be associated with cats maybe?

Speaker 7

It could be. It's mostly dogs, but it's also just to Clear, it's not it doesn't have anything to do with CBD or any cannabinoid derived medicine.

Speaker 11

But was there a prior study or maybe some type of That was undisclosed partner on Katz. Is that one still active or?

Speaker 7

I'm not sure which one that's actually I don't recall any undisclosed partner with Katz.

Speaker 11

That was a BD before David.

Speaker 7

It could have been. To my knowledge, there is the only one that we're looking at cats in again is the one in PE the University of PEI. And that's more clinical and R and D in nature as opposed to anything commercial.

Speaker 11

Okay. And there's The product is in your SEC filings called Disintech, if I'm saying that, I hope I'm saying it Probably, David, some controlled oil release film. Is that one active at all in any discussions?

Speaker 7

I'm sorry, can you repeat that? Did you say Disinteg?

Speaker 11

I think it's yes. Disinteg? Disinteg?

Speaker 6

Yes. This is correct. This is a platform that we have established and we filed IP on it. Right now, there are no current discussion on With the existing partner with that, but it's a platform that we still believe in and we're trying to protect from an IP standpoint as much as we can and the hope is to offer it to Future partner in the near to mid future.

Speaker 11

Okay. And last question for me, nothing going on with the I have two questions. So with heritage, is that kind of panned out?

Speaker 7

Yes, maybe First of all, let me talk about Heritage and then maybe Dwight wants to comment on our overall cannabinoid program. But heritage, the sales have been very low and I wouldn't put this on heritage, but it's more just the Canadian market in particular Has been quite lower in results than most people thought. So, heritage is well, I'm not saying By any means, if the program terminated, I would say that it's not forming a focal point to this company by any shape or form, Just with the effort and resource allocation and ultimately with material sales, which just aren't panning out, it's not something That we believe firmly in at this point, for all of cannabis, not specifically heritage again. And

Speaker 11

the THC Platform, if I could use that terminology, David, is that still an attractive opportunity for IntelGenx?

Speaker 7

I personally don't think so. And it's not just for IntelGenx. I think the market in Canada as a whole is very saturated. And I don't see where incremental business will come to the company. But we never know too.

Speaker 7

We're also very opportunistic. And if another partner comes to IntelGenx and asks us to develop as part of our CDMO business On particular products, I mean, we'd be very open to such an arrangement.

Speaker 11

So the horizon for medical THC and cannabis looks a little bit soft, if I can use that acronym or description.

Speaker 2

Yes, the market is very soft, yes.

Speaker 7

Okay. All right.

Speaker 11

And last question, how was Andre, you said before about the plant build out That you needed some funds to complete or expand the plant for production. Is that going alright?

Speaker 3

We're not there yet. I mean, as Dwight mentioned, and right now the focus of the company is really Short term revenue, and that should start unfolding early next year. But we have sufficient capacity right now to support the product launch. But at some point, we will have to definitely look at expanding because based on the Projections that we have for the product that will be launched next year will run out of capacity at some point. But right now, I would say we're fine for at least 18 to 24 months with the current capacity.

Speaker 3

Right.

Speaker 2

I mean it's an ongoing project to look at We run capacity utilization models on a regular basis, but we should be good Through till mid-twenty 25, if not till the end of 'twenty 5. And we will need to talk about this Perhaps in some more length at the end of the Q1 in 2024.

Speaker 11

Okay. And Any update any discussions on Par? Andre, is that still tabled pending the Endo bankruptcy?

Speaker 3

That's on hold. That program is on hold.

Speaker 11

Okay. All right. That's all for me. Thank you, gentlemen, And welcome aboard, Dwight. Thank you.

Operator

Thank you very much. Your next and is coming from Abraham Shapiro, who is a Private Investor. Abraham, your line is live.

Speaker 12

Good evening, Andre. Good evening, Dwight And David, I was hoping that you guys are down to $1,000,000 I was hoping that There would be some sort of financial financing news during the earnings, but time is of the essence. So I'm going to hold you guys that you're going to announce something shortly. What didn't catch my ear First of all, congratulations on getting the CDMO deal. It's about time some revenue starts coming in.

Speaker 12

Even though $3,000,000 a year is not what we're looking for, it's certainly a start in the right direction We get some revenue. But you mentioned that Rizza is where you guys are going, right, for the money. And you said you're looking for the right partner. What happened with the partnership with the firm in Florida?

Speaker 7

Let me clarify, it's David here. When we're saying we're looking for the right partner, the question was more referring in context To those in Europe, we still we have our agreement, our partnership. Our U. S. Commercial partner is Gensco Pharma based in Florida.

Speaker 7

So that there's been no change there. My comment again was more based on other markets within Europe.

Speaker 12

And what is Gensco doing in regards to the partnership lately?

Speaker 7

Well, we have regular update meetings with Gensco. So to launch a product, I'm sure as you can appreciate, Abraham, It's no easy feat and we're preparing for a launch. That's what we're doing as we speak.

Speaker 12

I mentioned it last quarter conference call That there's silence from them. Maybe the partner could announce something on occasion. I know that Aquestive doesn't say anything. Jessica doesn't say anything. I'm looking for somewhere from some of the partners.

Speaker 12

Again, you can't control other companies, but certainly you can recommend some sort of announcements.

Speaker 7

Yes. I mean, I hear you. What I would again, we can't really speak for other companies, but Gensco is a private company. There'd be Real not a lot of incentive for them to announce anything. And I don't even know if that's part of their standard business.

Speaker 7

I can't comment on them at all. But I mean, all we can control is what's in our purview at IntelGenx. And I can tell you, Riza USA is one of the pillars of the company.

Speaker 12

Okay. And when can we expect I missed the first part, I apologize. When do we think commercialization is going to happen with some revenue as Riza?

Speaker 7

We expect any time from the end of 20 23 up until the beginning parts of 2024. And the reason why there's a bit of a kind of A goalpost there, it's really just due to some moving parts that we're trying to work through right now. But I would say latest, we hope, Is going to be the first half of twenty twenty four.

Speaker 12

Okay. And there was I think it was that she had left One of your colleagues and she had mentioned a cat product. So I know that that's we didn't pull it out thin air. We heard we have been hearing that some cat or dog product Soon, I hope so. So listen, I'm happy that we're seeing some revenue and good job to bring some money in.

Speaker 12

I think that you don't want to sell it so cheap, you guys got to stay in business. So you got to raise the money, right? So if you have to dilute somewhere and I'm fine with it, gets in the goalpost.

Speaker 13

Abe,

Speaker 3

I would have obviously expected to talk about a little bit more About the financing, but unfortunately, I can't. But I can tell you that it's really coming.

Speaker 2

All right.

Speaker 12

I'm looking forward because you guys are you're cutting through a wire here. Good luck.

Speaker 3

Thanks, A.

Speaker 12

I'm rooting, shareholder for many years And I'm I like the new mousetrap and I'm rooting and hopefully We'll all become winners one of these days.

Speaker 3

Yes. Thanks, Alex.

Speaker 12

Thank you

Operator

very Your next question is coming from Adam Viverito, who's a private investor. Adam, your line is live.

Speaker 13

Hey, how are you? I'm on a headset with a microphone. How's the audio on your side?

Speaker 2

Great. Thank you.

Speaker 10

Good.

Speaker 13

Excellent. All right. Gentlemen, Good work on the pending contracts for $9,000,000 over the next 3 years. Wonderful. Hope things are going well.

Speaker 13

Just a quick question.

Speaker 8

You've been a holder for

Speaker 13

a few years and I don't want to share the frustration of, I don't know, 3 or 4 callers ago, but On the revenue front, it is

Speaker 12

what it is. We don't need

Speaker 13

to use negative descriptive adjectives and whatnot. But I just did a little research and I mean my blue sky thinking maybe ridiculous, but the TAM of the vitamin and supplement market is $39,400,000,000 I think that's U. S. I don't know about worldwide. That was as of 2022.

Speaker 13

So real quick, going back as a little kid, I remember there were chewable vitamins. Then as we grew older, we swallowed the vitamins. And then within the last decade, there was like a huge, let's say, emergence marketing of like gummy type of vitamins. Your technology, it's

Speaker 2

not novel.

Speaker 13

I mean, I remember Listerine scripts back in the day, but I don't know if there are like Film vitamins, I think it's an exceptional idea. And if you capture A de minimis amount of the TAM of $40,000,000,000 that would be huge. So I'll stop and ask, Has there ever been any discussions, thoughts about supplements and using your varied technologies?

Speaker 7

So okay, it's David here. I'll take a stab at this one. I mean, it's a fair point. Since Dwight and myself joined at roughly the same time points and to take really why Dwight was brought on to take the organization from R and D to commercial, I

Speaker 2

mean, the sky is

Speaker 7

the limit here, in my opinion. What we have to do to execute is be laser focused. And with our plan to focus on 2 to 3 products and really do well at them, then we can start talking about where do we go from there from a very strategic Perspective. But to rewrite the strategy and pivot to an altogether different area with one that we'd have to come fully up to speed on, I think that could actually take longer than pursuing our very laser focused strategy right now.

Speaker 13

Thanks, David, for the answer. But I'm not saying to deviate from your laser focused strategy. I'm saying to augment your strategy. If you think about supplements, they're not you don't have to go through FDA process approval process. There may be other Certifications whatnot that you have to go through, but it seems like a much easier lift, so to speak.

Speaker 13

And once again, with a TAM of Just under $40,000,000,000 if you captured hardly any of it, you're going to make a ton more money than you're making. That other caller's frustrations are valid. If you've been a shareholder for 5, 10 years, it's pretty much The same old, same old. I mean, if you look at the revenues, there's not much there. So I'm not saying

Speaker 5

to take your eye off

Speaker 13

the ball. I think you should be laser focused on your strategy, but there's nothing wrong with diversifying your strategy, pulling in a new team, Seeing what it takes to get a supplement on the market, even if it's a small test batch, what have you. Once again, I mean, it's so much easier than going through all these approvals and whatnot. It just seems like we're jumping through myriad hoops All the time. And that's if you hit it out of the park, wonderful, it's going to be a bonanza.

Speaker 13

But why not diversify your revenue stream With something that may be very achievable. I mean, go at any grocery, supermarket, Drugstore, I mean shelf space may be difficult to come by, but the supplement is a huge business. Dollars 40,000,000,000 is $40,000,000,000 Once again, if you capture a small oneten of 1%, I mean, you could do the math, That's more revenues than you've probably earned for the duration of the business thus far. So I'm not saying to take your way off the ball. I'm not saying that Remove the strategy or pivot from the strategy.

Speaker 13

I'm saying that add to the strategy. And there's no FDA approval for supplements to my knowledge, Vitamin C, what have you. So just food for thought and if you implement it, you hit on it, you could send me a free pack of vitamins or a small fighter suite. Thanks.

Speaker 7

Thank you and point noted.

Speaker 13

All right, cool. Thanks. I won't go on and on. Hopefully, we'll see a press release soon. Thanks.

Operator

Thank you, Adam. Your next question is coming from Brent Gaike, who is a private investor. Brent, your line is live.

Speaker 4

Yes, guys. You all are talking about RIZ and how it's The pillar of the company, do you all have I'm assuming you do, but I'm not sure if you can tell us. Do you have any I mean, what are you all projecting revenue wise? And do you think it's in 2024 or 2025? I mean, what are you all thinking?

Speaker 4

And is RIS going Make the company cash flow positive?

Speaker 7

Hi, it's David. I'll take Okay. Someone else want to take that?

Speaker 3

Yes. I think I should get

Speaker 7

David, I'll

Speaker 8

Okay. You take it.

Speaker 3

Yes. So I mean we've never given guidance, but it will take more than Riza, obviously, Bripenorfin, if approved and launched, will be probably the biggest contributor. So It's hard to say when we will be cash flow positive. It depends on the performance of Riza and bryprenorphine. But next year would probably be a stretch, But maybe 12 to 15 months to 18 months and we should be there.

Speaker 4

Okay. Thank you.

Operator

Thank you very much. Your next question is coming from You okay?

Speaker 2

Yes. No, I'm fine. Thank you.

Operator

Okay. Our next question is coming from Hugh Kiley, who's Investor. Hugh, your line is live.

Speaker 11

Hey, thank you. One question for Dwight. In your announcement, you put down out You want to do a top down or complete review of the where IGXT was the product, the focus? Any Redirection of the company, is this going to be the status quo on the products that are under development and under commercial considerations?

Speaker 2

Yes, that's a great question. If you're talking about a top down look at the strategy, David said it a couple of times, but I'll reiterate there's some players with there's some products with the agency That we need to bring to market. If we bring them to market with

Speaker 6

the

Speaker 2

CDMO business that was announced last week, then we have a business that's EBITDA positive likely. In the next quarter to quarter and a half, there's a full strategy review I need to go through. The other gentleman obviously brought the vitamins and something we're not going to discount. But in the short term operation, we're going to really focus on making it hitting the bogeys and changing it from promising and not delivering Promising and delivering. And in the maybe not the next conference not the next call, but the one after we can talk about Potential strategic changes in direction.

Speaker 11

So on the short term bogeys, you addressed some birizipore, Potentially if you get BELBUCA approved in the CDMO arena?

Speaker 2

Bupinephrine, yes. Bupinephrine, Riza and the CDMO for the CDMO volume. Those three products when mature Late in 2024, if the FDA approves the buponephrine, by then As we go into 25 of the companies then cash flow EBITDA positive.

Speaker 11

Okay.

Speaker 2

That's the game we're playing right now and that's the focus in the business, stay my optically focused.

Speaker 11

All right. And so the Is Venetilm still in that arena too?

Speaker 2

Absolutely. We talked about it. I talked in my remarks about the work that David is doing. But it's more R and D focus, it's pipeline, commercial sales beyond 25, But R and D, there's significant R and D revenues in the next 3 to 9 months.

Speaker 7

Okay.

Speaker 11

Okay. And that's my end of my question. Thank you, Dwight.

Speaker 2

You're welcome.

Operator

Thank you very much. That appears to be the end of our question and answer session. I will now turn the call back over to Mr. Gorham Any closing remarks?

Speaker 2

I want to thank everybody for their patience and their time. Clearly, we've come a long way over the last 5 years and there's a significant amount of frustration and our job is to clean that up and Make it clear to everybody directionally where we're going. And I just ask that people hang in there for the next 3, 6, 9 months and you start to see A progression of positive news out the business. Well, thank you very much for your confidence and I look forward to Our next call in 3 months and the one after that in 6.

Operator

Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation. Thank you.

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Earnings Conference Call
IntelGenx Technologies Q2 2023
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