IntelGenx Technologies Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 11, 2023

There are 13 speakers on the call.

Operator

Greetings. Welcome to the IntelGenx First 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.

Operator

I will now turn the conference over to your host, Stephen Kilmer. You may begin.

Speaker 1

Good afternoon, and thank you for joining us on today's call. With me on the line are Doctor. Horst Zerbeg, IntelGenx's Chairman and former CEO Dwight Gorham, IntelGenx's newly appointed CEO Andre Godin, our President and CFO Doctor. David Kadeckle, the company's Head of Corporate Development and Strategic Alliances Doctor. Frank Kia Tantonio, our Director of Clinical Research and Tommy Kemi, our Senior Vice President and General Counsel.

Speaker 1

Before we begin, I would like to remind you that all amounts 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 U. S. And Canadian 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.

Speaker 1

S. And Canadian Securities Commissions. I would now like to turn the call over to Doctor. Zerbe. Horst?

Speaker 2

Thank you, Steve. Good afternoon, everyone, and thank you for joining us for the Intelenx Q1 2023 Conference call. On today's call, I will provide a corporate update and discuss the progress we have 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

Before launching into an update, I would like to take this opportunity to welcome our newly appointed CEO, Dwight Gorham, to our teams And to his inaugural Intergenerational FinTechs call. About a year ago, I informed the Board of Directors of my intent to retire as CEO of the company. The Board subsequently appointed a succession committee chaired by Bernard Boudreaux, which after thorough search that was conducted with the help of the Montreal based Executive Search from Heitrich and Struggles recommended that the Board appoint Dwight Gorham as the new CEO of the company. On March 13, the Board accepted my resignation and unanimously appointed Dwight Farm as the new CEO Effective upon my resignation, I will continue to serve on the Board and remain available to help the new CEO Dwight is exceptionally well qualified to lead IntelGenx through And beyond its transformation from an R and D company to a successful commercial manufacturing operation, Dwight is an engineer by training. Most recently, Dwight served as President and CEO of PillowHy Pharma, Before joining Philip IFA in 2015, he served as Senior Vice President and General Manager, Global Operations Prior to that, we held a variety of senior roles, including President and CEO at AccuCaps Industries, A leading North American supplier of Sarskeletin capsules, a variety of management assignments at the borrowers' welcome facility in Montreal, President of Plexus Pharma, a Montreal based CMO and supplier of parenteral and glyophilization products, General Manager of Baker Cummings and Director of Operations at the Canadian arm of Glaxo, which is now at GSK.

Speaker 2

During each of these assignments, we managed to significantly improve the financial performance of the company or the unit While he's still just getting up to speed, Dwight has agreed to join us today on the call You will be available to participate in the Q and A session following our introductory remarks. With that, I will now update on our key programs. First on AKAI, Phase 1 PK and dose escalation PK meaning pharmacokinetics A dose escalation study using DMT buccal film is ongoing. Activities have also commenced Moving on to RIZAPORT. Last month, the FDA approved our 505(2) NDA for RizaFilm, the U.

Speaker 2

S. Market named for Rizafor. Importantly, this followed a successful Pre approval inspection by the agency of our Montreal manufacturing facility in March of this year. This was a major milestone achievement for IntelGenx as it was our 1st FDA approval for a film product That is based on our proprietary Versafilm technology and that was fully developed in house. We certainly view this as an important validation of our Versafilm technology and we'll communicate this accordingly According to the American Migraine Foundation, dollars 39,000,000 or 12% of Americans migraine, which is the 2nd leading cause of disability nationwide.

Speaker 2

Our partner for Resafilm in the U. S, Genscor Pharma is targeting the manufacturing of validation batches, which would be the first available product or later in the year and then will commercialization in early 2024. I should also mention that the FDA approval came with the request to develop And submit within 2 years to FDA for review and approval of 5 milligram pediatric version of the film. Recently, we met with Axeltis, our partner for Oui Support in Spain. They reported great feedback from COSCARRI doctors and patients that have been struggling with significant product substitution at the pharmacy level.

Speaker 2

We are now working on a strategy to overcome the loss in sales and Axcelis is waiting for regulatory approval to implement that new strategy. In January, we entered into an exclusive supply agreement for RIZAPORT with R1 Pharmaceuticals Industries, Lebanon SAL in various countries in the MENA region. Moving on to tadalafil, as we reported last quarter, There was a slight delay as our partner, Questive, had encountered some API However, the R and D teams from both companies worked diligently And formed a task force to address the issue. We believe that we have now solved the API issue and are preparing for manufacturing of the clinical batch. As to Canavis, the arbitration process involving Tilray is currently in progress.

Speaker 2

As arbitration proceedings are confidential, we are unable to provide further details regarding this dispute at this time. We will promptly update our investors as soon as a resolution has been reached. On Montelukast, we were able to add 5 more sites to the study And as a result, we've seen an increase in patient enrollment, especially in the last 2 months. We're targeting to end enrollment by July, While enrollment in the ongoing Phase 2 Buena clinical trial in patients with mild to moderate Alzheimer's disease or AD is continuing. We are also now expanding the Montelukast repurposing program to include another major neurodegenerative disorder, We believe that Montelukast Versafilm has the potential to be disease modifying In February, we announced the research collaboration Doctor.

Speaker 2

Pierre Svenningsen of the Karleen State Institute and plan to conduct a multicenter, randomized, I will provide a placebo controlled clinical study to investigate the use of Montelukast Varza film for the treatment of PD. Doctor. Svennelson will serve as the Lead Principal Investigator for the planned study and was Sponsored with a grant awarded by the Swedish Research Council in the amount of $2,000,000 Ultragenyx will supply Doctor. Svennelson with both active and placebo films to be used in the 18 months treatment regimen On completion of the study, IntelGenx will retain the intellectual property rights and use the findings We currently expect this study to commence in QC 2023 and we will provide more details on its design at that time. Moving on to Xyremet.

Speaker 2

In April, We announced that Chemo Research, through its patient and affiliate Xyremet, received a complete response set up from the FDA Regarding the submitted abbreviated new drug application of buprenorphine buprenorphine buprenorphine buprenorphine buprenorphine buprenorphine This is a generic version of the DEBUCA, an opioid that is used to manage pain, severe enough to require daily Around the clock, long term treatment with an opioid, when other pain treatments are inadequate. BELBUCA was approved by the FDA in 2015 and is applied to the oral buccal mucosa every 12 hours. Lupinostilbackel's film incorporates our Versafone technology and a novel formulation and is designed to be bioequivalent I'm sorry, designed to be paid by equivalent lower cost alternative for patients. ParaMed's Yorel response is expected in the current quarter. Lastly, Animal Health.

Speaker 2

In the Q4, we entered into a new vetasil feasibility and development agreement with an undisclosed animal health company The results from the CBD study are expected in the current quarter. As the newly appointed Head of Corporate Development The strategic alliances of the David Kideckel is also engaged in discussions with potential major animal health partners. And with that, I would now like to turn the call over to Andre for a review of our financial results. Andre?

Speaker 3

Thank you, Urs. Good afternoon, everyone. As Urs just mentioned, Take a few minutes to discuss the company's financial performance for the Q1 ended March 31, 2023. On the revenue front, total revenue for 2023 Q1 amounted to 162,000 compared to 237,000 in the same period last year. The change is mainly attributable to decreases in R and D revenues of $63,000 and royalty on product sales of $12,000 Operating costs and expenses were $2,800,000 for Q1 2023 versus $2,500,000 for the corresponding 3 month period of 2022.

Speaker 3

For Q1 2023, the company had an operating loss of CAD 2,600,000 compared to CAD 2,300,000 in Q1 of 2022. Adjusted EBITDA was negative CAD 2,400,000 for Q1 2023 compared to a negative $2,100,000 in Q1 2022. Our net comprehensive loss was $2,900,000 or $0.02 on a basic and diluted per share basis For Q1 2023, down slightly from a net comprehensive loss of $3,000,000 or $0.02 per share for the comparable period of 2022. As of March 31, 2023, the company's cash and short term investment Total 3,800,000. I will now turn the call back to Doctor.

Speaker 3

Zerbe. Horace?

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 to questions. I'd like to remind you that our forward looking statements apply to both our prepared remarks

Operator

It may be necessary to pick up your handset before pressing the star key. One moment please while we poll for questions. We have a first question in the queue from David Nguyen, a Private Investigator

Speaker 4

And see revenue. Have we gone to the PBMs? Have we gone to the wholesalers? I mean, I just want to understand the marketing plan or the commercialization plan for this product moving forward.

Speaker 2

David, we missed the first part of the question. Ernie, could you please repeat the question?

Speaker 4

Basically, I'm sorry. So thank you again for allowing this. RIZAPORT has been approved. We have a I just want to understand The commercialization plan of IGXT for this product, because it's pretty significant to gain an FDA approval even though it's a 505B I'm just trying to understand has the company contacted PBMs, wholesalers? How are we going to distribute this product?

Speaker 4

How are we going to make it aware that's on the market compared to the oral option that's out there?

Speaker 2

David, do you want to respond to that?

Speaker 5

Yes, happy to. Hi, David. Thanks So for the question, David Cadeckos here, SVP, Head of Corporate Development and Strategic Alliances. So we do have a commercial partner in the U. S.

Speaker 5

That we've had for quite some time. That commercial partner is Gensco. So we are in active discussions as we have been since the inception or the execution of the contract to finalize commercialization plan. So all planning for this is well underway for the launch of the product in the U. S.

Speaker 4

Are there any details you can give to how they're going to get this out to the wholesalers And Mig, also like physician awareness channels, which you're going to market this product?

Speaker 5

I think it will be more traditional type of sales and marketing efforts here. We're unable to really give more final details at this point in time with Gensco and mainly because we're still finalizing the commercialization plans for the product.

Speaker 2

Yes. I should David, I should probably add, because it's relevant for the timing of the launch that We still have to conduct the process validation. So we have to manufacture 3 batches and undergo a full process validation exercise with those. That's a requirement by the agency. And during that time, we will finalize with our partner, Gensco in detail the launch and marketing activities.

Speaker 4

So final question on RIZAPORT, could we expect a 2023 launch?

Speaker 2

David, you want to respond?

Speaker 5

Yes. I would say It's highly unlikely that we'll see a 2023 launch. It is possible, but just given all the planning that's involved To launch a product once approved by the FDA, I would say we're looking at sometime in 2024.

Speaker 4

Okay. Thank you for that. In regards to Montelukast, Doctor. Zug, you've talked about the enrollment speed. It sounds Very favorable.

Speaker 4

Say that you stop enrollment in July, when can we have the first set of data?

Speaker 2

Frank, do you want to respond to that? Frank is our Clinical Director or Director of Clinical Research.

Speaker 3

Frank, you have to unmute yourself.

Speaker 2

Frank, can you unmute yourself?

Speaker 3

Maybe Zendesk Can anyone

Speaker 2

speak to the data?

Speaker 5

Yes, I guess. Boris, do you want

Speaker 1

So basically, if

Speaker 3

enrollment It's finalized by June, July. Since it's a 6 months treatment, Then we're expecting the trial to be over by year end or early Q1, so data should be available late Q1 or early Q2 of next year.

Speaker 4

Right. Thank you so much. I don't have any more questions.

Speaker 3

Thank you.

Operator

Our next questioner comes from Ebrahim Shapiro.

Speaker 6

Yes. Hi. Good afternoon, Andre and Horace. I like the news of the product development the past quarter, so congratulations on the FDA approval. My concern is cash on hand.

Speaker 6

What can we expect for a raise? That's Andre.

Speaker 3

Yes. Hi, Abe. Thanks for your question. I think we're very cautious and patient because of the stock price, obviously, but we have multiple options. We're looking at multiple options.

Speaker 3

We will have to raise money at some point. Right now, we're managing the cash very carefully. But I wouldn't worry. We always find ways and we'll find ways again. And but We're expecting some good catalysts to come in the near future.

Speaker 3

So hopefully, that can give some momentum to the stock and we can Raise money at a higher level because as you can see, the stock price is pretty depressed right now. I mean the entire market, but especially small cap. So we're being cautious, But we have a plan and we have multiple options.

Speaker 6

Okay. Because I saw your partner, Aquestive, Its stock has risen nicely in the past quarter. I'm looking forward to that happening to It's Helgenx. I have a couple of other questions. Gensco, your partner, are they going to make some sort of announcement, Some sort of public relations announcement put something on their website?

Speaker 5

That's a good question. I mean, Gensco is a private company, so there's likely no press release issued. As far as products available on their website, I mean, yes, I mean, that's not a bad idea either.

Speaker 6

Because we go on there, there's no mention of IntelGenx at all.

Speaker 5

Yes, I mean, to their defense, however, I mean, the product was just approved 2 to 3 weeks ago. So We'll let them repeat a bit. But we have regular communications with them and I think that's a good idea. Thank you.

Speaker 6

That would be good. That's it. Welcome to IntelGenx. Best of luck and Doctor. Zerbe, enjoy your extra time.

Speaker 6

That's all I got for now. Thank you.

Operator

Thank you. Thank you. We now hear from Hugh Kiely.

Speaker 7

Just to follow-up, good afternoon, everyone, and welcome to the new members that joined IntelGenx family. Excited to have you on board. Just a couple of follow-up questions and I'll go back in the queue is regarding the Gensco rollout And with the comment that David made is the normal sales process, any idea of the number of sales People that they have in that organization, I know it's private, so the information is limited in the scope. Just wondering how they're going to tackle the major U. S?

Speaker 5

Yes. No, thanks for the question. I mean, it is a Fairly smaller organization, I'm not sure the number of employees that work there, that wouldn't be considered public information. But I would say it's not necessarily even the number of salespeople they or any organization would have in commercialization. It's where is the product going to be positioned as far as effort allocation is concerned.

Speaker 5

And this will become one of their top priorities as an organization. So we're very much looking forward to working with Gensco at this point. But as far as again, I wouldn't I don't know if I would be focused so much on solely at least the number of salespeople, Just back to effort allocation.

Speaker 7

Okay. The follow-up to that one is The other countries that have partnered with IntelGenx, the Visipor, any update on South Korea or the Anwar territories?

Speaker 5

Yes, the

Speaker 2

I'm sorry, go ahead, David.

Speaker 5

I was just going to say there's no real update to Arwan. All I can say is There are ongoing negotiations and discussions with all of the above that you just mentioned.

Speaker 7

Okay. And consistent with the RIZAPORE, any details of The product substitution and packaging that their Excelsior experience in Spain and we have an estimated timeframe where that would Everyone is pretty excited with the rollout in 18 months ago. Just do they see a light at the end of the tunnel on that, David?

Speaker 5

Horst, I'll leave that one with you. Yes.

Speaker 2

What Xeltis has done there is Change the packaging format in such a way that it would Prevent substitution at the pharmacy level. They submitted that a few months ago to the Spanish regulatory authority and they're waiting currently as we speak for approval. When the approval will be issued, obviously, I can't tell you, but I know it's pending. Axeltis is waiting for a response from the authority and then Whereas immediately after that, they will transfer that into the market.

Speaker 7

With that issue that was in Spain, Doctor. Zvi, would that be a challenge in the other countries that Excelsius has The right to commercialize in Europe?

Speaker 2

I would think so. We don't have any specific Knowledge about that, but I would certainly think so. I mean, Axeltis has been around for some years. So I think That they will learn from past experience and not commit similar mistakes in other jurisdictions, but that is Speculation on my part, we haven't discussed that specifically with them.

Speaker 7

Okay. I thank you for that response. And then follow-up on the Q4 call. Was any update on The discussions with a company that would be potentially replacing PAR for SUBOXONE?

Speaker 2

That is that discussion and I know what you're talking about. I don't want to actually, I can't disclose that potential partner. That discussion is currently on hold because bankruptcy proceedings have Still not being completed and so we have to wait until that Process has come to a closure in full, because only then will the asset Become available. We have in the meantime and our potential partner for that has in the meantime Confirmed with par that the asset would be available. So I assume that once The process has come to a conclusion that those negotiations will resume.

Speaker 7

Okay. It will be hard to put a timeframe on that, I imagine. All right. With the same as The Endo project that we discussed in the last Q4, the undisclosed with Endo, is that still Terminated or tabled or ended?

Speaker 2

That was the second Program that we had with EndoPAR, that program, unfortunately, at this point is On hold, we have not, at this point anyways found, an alternative partner to Continue that program.

Speaker 7

Is it still a potential A product that would be attractive to somebody, do you believe or is that maybe shelved?

Speaker 2

It depends on how the sales of the reference product Develop, until a few months ago, the sales of the reference product, The brand, we're lagging behind expectations. And I haven't checked recently as to whether there has been any, at least say, significant improvement. So that's really all I can say on the comment on that one.

Speaker 7

Okay. Two more, then I'll go back in the queue. The transdermal patches discussion still going on in that Unique product?

Speaker 2

Yes, that is still going on and it is the likelihood that, that Negotiation will come to fruition has increased. We have received a Provisional, informal notice of acceptance By our partner, so there I'm very confident that this will come to a Positive result. David, if you want to comment further, that would be the extent of my comment.

Speaker 7

Thank you, Doctor. Zhivi as always.

Speaker 2

Thank you.

Speaker 7

Did you No comment, David, or was it any?

Speaker 5

Yes, yes. No, I thought we were moving on. Yes, I did want to make a comment that that is something from a business development side. That is something we're pitching to potential clients. And I know that there is interest just in my short time that I've been here, It's come up several times with potential partners.

Speaker 5

So the transdermal technology is definitely a positive asset that we have within our tool bag at IntelGenx for future potential partners.

Speaker 7

And the other one that's in your tool bag, David, is loxapine. The last call, there was potential discussions going on with An interested partner? Is that still active or

Speaker 5

I'll put this one back to Horst again.

Speaker 2

Yes. On loxapine, there's no progress to report Since last quarter, we will we do but quite frankly, Because of obvious reasons for the past couple of months, the focus has really More being on the Saramet activity on RIZAPORT And related aspects, loxapine has not been pushed to the side, but it has not Received much attention over the past quarter. It is it continues to be an important and as we think Very valuable asset and as soon as BD finds the time, they will Proactively continue to reach out.

Speaker 7

All right. And one last one, then I'll go in the queue. The Belbuca with The CRL and then with the challenges with the other company, I follow that pretty closely with the legal issues. Is there still 4 indications on the With your partner for the that would be developed for the marketplace for the 4 doses or has it changed?

Speaker 2

No, that hasn't changed at this point. That's still the case. I mean, eventually, the partner Plans to commercialize all strengths, but for the moment the focus is on those core strengths. But I mean the reality is the sales volume of those two strengths That we are not actively pursuing at this point is in the 10% range, so it really wouldn't Make much of a difference. Those two low strengths are mostly used in the initial phase to titrate patients up to their final maintenance level.

Speaker 2

And so that's why they don't Play any significant role sales wise.

Speaker 7

All right. And then last, I'll go in the queue on the Vetafilm. Is it 3 companies that we're in partnership with or just 2 with multiple programs?

Speaker 2

Yes. David, I'll pass it on to

Speaker 5

you. I'm sorry. Can you repeat the question?

Speaker 7

On the Vethafilm Partnership, David, is it 3 companies or just 2 companies with a multiple of programs?

Speaker 5

All right. Well, there's multiple programs ongoing right now. We do have there's a couple of them There were deepened discussions with, and hope to have an update for you once they do if they become public over the next little while.

Speaker 7

Okay. But is it 2 are these still 2 companies or more than 2 that are under a partnership For a contract for trials?

Speaker 5

Yes. We have University of PEI, Prince Edward Island in Canada. And I believe there's another one, and I'm not sure if that's been made public, and that would be for CBD in dogs. Yes.

Speaker 2

So there are 2 I can confirm that it's Horst. And To confirm what David said, we're actively talking to 2 companies. And then in addition to that, we are We're conducting a study with University of Prince Edward, Ireland.

Speaker 7

Okay. Okay. I'll go back in the queue. Thank you for your responses and taking my questions.

Speaker 2

You're welcome.

Operator

We now hear from Brett Gaeke.

Speaker 8

Yes. I was wondering, I think Andre had mentioned some catalysts Coming up that he thought would boost the share price. I mean, if an FDA approval Wasn't a catalyst to boost the share price. I mean, what do you all have coming up that you think is going to Do some good to the share price.

Speaker 2

I mean, we have significant catalysts coming up. I can Only confirm what Andre said, but for obvious reasons, we cannot provide any details. So I apologize for that. Andre, if you want to add to that.

Speaker 8

And these are in 2023?

Speaker 2

Yes, in the near term.

Speaker 8

Okay. One more question. Go ahead. Have you guys entertained at all a reverse split or anything to try to Get the share price up to maybe attract investors. I'm sure at a barely over 10% share price, there's a lot of investors that Not not

Speaker 2

seriously. I mean, the stock is being Andre, you're Welcome to comment further, but we think that the share price is right now massively Manipulated. And so We're not contemplating a reverse split at this point. Andre, feel free to add to that.

Speaker 3

Yes. I don't think that the reverse split would be an answer. If we were to at some point Uplis and Nasdaq, that could be helpful. But at this level, I think that what we need to do is really Execute on our front. Like I said earlier, there's some catalysts coming, Work on the with Tharamid with our Gripen Orphan program to get it approved, launch product on the market, and I think that will definitely Make the stock appreciate and since there's a lot of short on the stock right now, We basically need to squeeze the short and the only way to squeeze the short is By executing properly and that and announcing very tangible news, And that's what we're working on right now.

Speaker 2

And increased volume with that.

Speaker 3

Yes.

Speaker 8

Right. Okay. I guess I just would have expected the RIS announcement to have done that a little more than Obviously, it didn't do it at all as we've gone backwards, but I appreciate you guys' information. Thank you.

Operator

You're welcome. Our next questioner is Badeh Zinedine.

Speaker 9

Hi, good afternoon, gentlemen. My first question is in regards to the CRL that was received by chemo. Per your press release, you said that chemo received The CRL, so is it fair to assume that the CRL has nothing to do with the actual film and its stability and more of Like a packaging technicality on the partners' end? And if you can shed some light on the CRL?

Speaker 2

Let me just think how to properly respond to that. There is one tox related question That, our partner, however, thinks to be able to respond to within There was another Comment that we quite frankly don't understand because we believe that we Provided the information to the agency and that's the main reason as to why Our partner has filed a request for reconsideration.

Speaker 9

Okay. So it's like just to like sum it up, the CRL had nothing to do with like for example the stability of the film or anything To do with its the manufacturing part of it, is that safe to say?

Speaker 2

It has got nothing to do with the manufacturing And or the stability, that is correct.

Speaker 9

Okay. Okay. The next question that I have is In regards to Heritage and your CBD film, any update on that? Would like new orders from Heritage? How is that whole process going like From sales and so forth.

Speaker 2

Yes. David, I would prefer if you responded to that. You We met with them just a few days ago, please.

Speaker 5

Yes. So the Heritage agreement is still proceeding. The purchase orders we hope and expect will come in short order. I mean, if you follow the Canadian market at all where this Where the deal is for at this time, the Canadian markets in general within cannabis is just not produced to the level of expectations that a lot of investors and analysts had initially predicted. So moving forward, while we're optimistic that Heritage will continue to place additional orders, It's not we don't necessarily hold the same level of grandiose expectations for the Canadian cannabis market, as potentially historically, some of my predecessors did.

Speaker 9

Okay. All right. And the next question that I have is in regards to the RIZAPORT Versafilm approval that you recently got, was IntelGenx expecting any like Sort of like royalty payment upon FDA approval from Gensco? Was that like in the contract?

Speaker 2

There is a payment due upon shipping 1st commercial Batch, if I remember correctly. Is that correct, David?

Speaker 5

There's actually a payment due from the time of FDA approval. And yes, that's contractual.

Speaker 9

Okay. And my last

Speaker 3

Right now, but yes, exactly.

Speaker 9

And this will be reflected in Q2?

Speaker 3

In Q2, yes.

Speaker 9

Yes. Okay. Is there any way that you can shed light on roughly like is it like a 6 figure, 7 figure royalty payment or?

Speaker 3

It's 6 figures.

Speaker 9

6 figures, okay. My last question is in regards to the Arwan Pharmaceuticals and that whole contract that you have with them. Since the RIZAPORT just got FDA approval, are you going to be supplying Do you report to those nations directly from your manufacturing facility in Canada?

Speaker 5

Horst, I'll give this to you, but my understanding is that we're currently assessing different parts

Speaker 2

Yes. The deal was negotiated On the basis of the European approval, so For the most part, the product would be manufactured by our Manufacturing partner in Europe and we would receive royalties. However, we do have under degree of the option of Although I'm manufacturing the product ourselves.

Speaker 9

Okay. All right. I just wanted to touch base on one thing that was mentioned by a previous caller and what Andre was saying Sorry, in regards to possibly considering a reverse fit, I just want to say that I think IntelGenx has come a long way on its own and I highly, highly don't entertain the idea of a reverse split. I think The results and the execution of this company will speak for itself and it will eventually get the company to the Fair valuation where it needs to be because it's like highly undervalued right now. And I think the company, what you guys are doing, Focusing on execution and not just manipulating the stock price Just to make the company look appealing, I think what you're doing is an amazing job and we've been supporting you for all these years.

Speaker 9

I've been with IntelGenx for like 11 plus years And I believe in the company and I think we're at the finish line.

Speaker 2

First of all, I really Appreciate the comment. Thank you so much. But then what I really want to stress, we're Fully on board with your assessment. I mean, we have discussed a reverse split Several times and we have every single time come to the same conclusion, this is nothing that we would seriously entertain. And going forward, I cannot see that to be changing at all.

Speaker 2

If Andre, if you want to add to that, If you know, please go ahead, Pat. But my position on this is very clear.

Speaker 3

Yes. I mean, if I may had, I already commented on that. And I think that we're fully aligned With your comment here and the only way that we would contemplate that As if the stock was much higher and it would be to migrate to NASDAQ. But right now, it's totally out of the question to contemplate any reader split.

Speaker 9

I got you. I got you. And congratulations to you guys on the RIZAPORT approval And welcome to Dwight to the company and we are supporting you and we are fully behind you and we believe in the vision that IntelGenx has.

Speaker 7

Thank you very much for your support.

Operator

We have Hugh Kiley back on the line.

Speaker 7

Doctor. Jubei, first of all, my apologies for not recognizing you and the company on the successful FDA approval of Visipor, I dropped the ball on that one. So congratulations to you and your team members and The continued long focus on that successful journey. A couple of questions I have, Follow-up questions on the cannabis film with The market acceptance of the film is slowing down in that. Does the intent still to focus on The adult use or the medical cannabis, where do you see the biggest market opportunity?

Speaker 5

I'll take this one. I think

Speaker 2

I mean, without question, the

Speaker 5

bigger opportunity is within adult use in Canada as opposed to medical. That said, there's a much higher price points in Medical too. So we're opportunistic, as To which market to target. But to be honest with you, Hugh, this isn't so much around what IntelGenx It's more a matter of what Heritage is going to be focused on, our commercialization partner, And they deal in both sectors within the Canadian cannabis market, both medical and adult use.

Speaker 7

Okay. And then the expansion, I know we've been in Australia and Canada. Is there any other Countries with heritage on the horizon and or other partners, just taking the same 5 countries outlined on the investor presentation?

Speaker 5

I don't know which countries or when that investor presentation was compiled. But like I said, as I just started a month or 2 ago, I'm in the process of reevaluating a lot of previous business opportunities and where we're going to invest business developments time and effort. And cannabis is certainly one of those areas that I'm keeping a close eye on. That said, keep in mind, we do have the potential arrangement with Tilray subject to the outcome of our dealings with them. So as far as additional countries, the U.

Speaker 5

S. Right now is likely not going to happen just because of the legality There and then Australia still relatively small markets, certainly maybe parts of Europe, but Canada is really the focus at least for right now.

Speaker 7

Okay. Thank you for that one, David. And just on Cannabis oral film, there's a handful of other companies out there. Any of them you see as A strong competitor to IntelGenx product?

Speaker 5

To be honest, I haven't seen Any oral film strips in cannabis. But even if I so I would have to do some more due diligence if others exist. But yes, to my knowledge, I don't know of any others, at least not in Canada and other areas of the world that could be a different story. Yes. So I'll leave it at that for now.

Speaker 7

That was a very good answer. The pardon my humor. Doctor. Zhivi, Any interest in partnership with anybody with your major repurposing effort, Montelukast?

Speaker 2

We're waiting until we have initial results Actually from both studies, I mean the Buena study is nearing its end. So early next year, 2nd quarter, 1st, 2nd quarter, we will know the outcome and will then in earnest start our outreach. We had in the past discussions with a number of companies, Big Pharma certainly amongst them and with no exception, The message that we received was, we're interested, but show us the data. So With that in mind, we haven't seriously entertained any outreach activities, while Buena study is still ongoing. I suspect that with the Parkinson's study, It hasn't even begun.

Speaker 2

It will be similar. However, The situation is different insofar as Professor Swenningston, The lead investigator of that study already conducted An efficacy study with montelukast in 40 patients and found A significant level of efficacy, which prompted him to Design this much larger study, and if I recall correctly, in 170 patients. So There we have very good evidence that the molecules is in fact Effective in Parkinson's patients, so there the outreach might start sooner.

Speaker 7

That's very good news. That would be very good. Last question, Andre, is the Regarding some of the prior questions on the catalyst in the air, the catalyst you were indicating over and above RIZAPORT and BELBUCA Or is there something else maybe in horizon?

Speaker 3

Yes, it's something else. I mean, obviously, we're working on multiple fronts. This is very active. So, To pull front, these are very active. So I mean, of course, we want this Ripernorsen film to be approved and launched.

Speaker 3

That's a priority because it represents a great volume, great revenue for us. But the focus is also on other things. As you can see on the corporate presentation, and hopefully we can have some catalysts there as well in the near term.

Speaker 7

Okay. That's all for me. Thank you all.

Speaker 3

Thank you.

Operator

You're welcome. David Wynne?

Speaker 2

Yes. Thank you. Just one

Speaker 4

more quick question. It's great that we have a new management team in Is

Speaker 2

it safe to assume for

Speaker 4

the next earnings call that they will be up to speed on all the company's operations? And I know Mr. Kardekko, you mentioned that you're going to look at past programs. Will there

Speaker 2

be an update

Speaker 4

on future programs based on what you have what you'll be seeing in the past And maybe some of what Andre said, what other programs you're looking at in terms of business development. I mean, I just want to make sure that When we come to this next call, it's clear cut. It's not a lot of going back and forth, and we have our new CEO speaking to the investors. Yes.

Speaker 2

I think that one I can confirm. The new CEO will be actively running The next investor call, that I can say. I would have mentioned that in my concluding comments, but since you're asking that, Then I can confirm.

Speaker 4

Thank you.

Operator

Abraham Shapiro.

Speaker 6

Yes. Just one last thing. I just want to mention that I'm really happy of the results this past quarter and Congratulations. And certainly, the share price is way undervalued in my opinion. I went in as I nibbled for some more at this price, but I'm 110% behind not doing reverse split.

Speaker 6

I think a reverse split plays into the hands of the shorts and I'm with you 110%. Please do not do a reverse split. Best of luck to all. Thank you.

Speaker 2

No worries, Aid. No worries.

Speaker 3

Thank you, Aidan. Yes.

Operator

Dustin Foster?

Speaker 10

Hi, gentlemen. A quick question and a quick comment. The question is about the arbitration with Tilray, and I understand you can't say anything in terms of substance content. Can you give Any color on timing, either what would be agreed to going in, when a decision would come or anything else without violating your oaths to give us a little idea On progress or timing?

Speaker 11

I mean, the only thing I can tell you is that the most likely decision would come in the fall. This is the as far as we can go, this is highly confidential and that's the reason why companies decide arbitration instead of court processes. If If we were in part, I could give you the full picture, but now I just don't want to hamper our position.

Speaker 10

Of course, and that's fine. That is helpful and thank you. Finally, I was a shareholder many a year ago and have just recently joined you guys again. And at that time, several years ago, I think the reverse split you actually had authority for it from the shareholders and decided not to do it. And I think that was one of the boldest And wisest things you gentlemen did because most small cap money losing companies I think that that's the answer.

Speaker 10

And of course, as we know, the original share price after reverse split goes right back down within 8 months or 10 months To where it was, the market cap is 1 tenth of what it was and even being part of the NASDAQ is overrated because the dark Pool trading, off exchange trading is there too. So I just want to congratulate you on that decision years ago and affirm that your ongoing decision not to entertain it or even contemplate it is smart and wise and at that time bold. And thank you again. I look forward to good things this time, although I lost a little money with you guys years ago. So thank you again.

Speaker 3

Thank you.

Speaker 2

Thank you.

Operator

Doug Distler.

Speaker 12

Hello. I just want to thank Horst for being accessible and congratulate him on his retirement and Leadership and vision over the years and welcome to the new management team. I have a question. What product or products in the pipeline has the most potential to generate the revenue that's needed To place the company in a breakeven position the quickest?

Speaker 2

David, I think that's one for you.

Speaker 5

Yes, that's a I was going to take that. So that's a good question and that's part of our exercise in defining, which of the business segments we should be targeting with a priority basis. What I can tell you is that RIZA with launch into the U. S. Is likely not Going to be the highest potential revenue generating opportunities.

Speaker 5

That's not to say it's I mean, it's still a major Priority for the company, one of our top priorities. But as far as drugs that are approved, if and when We addressed the CRL with our partner with ZiroMed. Between that and Riza, those are going to be 2 of the Most important products to the company. But then you look at other potential products as well that we have Within our pipeline, tadalafil being a very important product used for ED. And then another area, When you look at and when you talk about profitability, it's one thing to talk about revenue, but it's another thing to talk about margin.

Speaker 5

And that's something that we have to be very and careful with in defining what are the highest margin types of segments and businesses we target. And one of those areas Is our CDMO opportunity and that's a pivot that was undertaken several months ago where we hired another business development member as part of my team, and he's really mostly focused on CDMO outreach and generating new business from that avenue. And moving forward, I expect you'll be hearing more and more about that

Speaker 12

Okay. Thank you. One other question, you may or may not be able to Answer, but with regard to legal expenses on the litigation regarding Tillery, Have those expenses been high? And does the company have the ability to recapture Any legal expenses should they be successful in the arbitration settlement?

Speaker 11

Maybe I can answer that. Arbitration contrary to court is a process where you can normally recoup legal expenses. That means at the end, the arbitrator will rule on legal fees as much as the substance of the case.

Speaker 12

Thank you. That's all I have.

Operator

Thank you, Kiley.

Speaker 7

A quick question for Tommy regarding your comment with Touay, Somewhere potentially in the fall, is there a potential that could be sooner than Tommy, If an agreement is worked out or settled?

Speaker 11

We always hope that something can happen sooner, but To answer the question, we don't have anything that would give us any indication other than something sometime in the fall.

Speaker 7

Okay. Okay. That's it for me.

Operator

We have reached the end of the question and answer session. And I will now turn the call over to Horst Dezerb for closing remarks.

Speaker 2

Thank you. And this concludes our Q1 2023 investor update call. I would once again like to thank the entire IntelGenx team for its hard work and dedication, Our Board of Directors for their continued support of the management team and finally, our investors for continuing to believe in and supporting us. And on a personal note, I would like to reiterate what a pleasure it has been steering this company to this pivotal stage, and I look forward to continuing to contribute to his success as Chairman. Naturally, going forward and in future quarters, as I previously mentioned, Dwight will lead these calls instead of me.

Speaker 2

And as my last comment, there is really no doubt in my mind that I'm passing the torch Into the right hands. Thanks to everybody and goodbye.

Operator

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
IntelGenx Technologies Q1 2023
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